U.S. equity markets experienced a notable shift in sentiment during afternoon trading on Thursday, August 14th, 2025, as a hotter-than-expected Producer Price Index (PPI) report for July tempered investor enthusiasm for aggressive interest rate cuts. After a strong showing on Wednesday, which saw major indexes reach new highs, today's inflation data prompted a broad market retreat, though gains in influential technology stocks helped to mitigate steeper losses.
Major Market Indexes Reflect Inflation Concerns
As the afternoon session unfolded, the major U.S. market indexes largely moved into negative territory. The Dow Jones Industrial Average (DJIA) was down approximately 0.3% to 0.4%, reflecting a decline of around 141 points from its previous close. The S&P 500 (SPX), which had set an all-time high just yesterday, edged down by 0.1% to 0.24%. Similarly, the tech-heavy Nasdaq Composite (IXIC) was shaving off about 0.1% to 0.29% from its recent record, indicating a slight pullback in the technology sector that has largely driven recent market gains.
This downturn contrasts sharply with Wednesday's performance, where all three benchmarks closed higher, with the S&P 500 and Nasdaq Composite achieving new closing highs. That rally was fueled by optimistic expectations for a September interest rate cut by the Federal Reserve and robust second-quarter earnings results. However, today's PPI data has introduced a fresh wave of caution, leading traders to reassess the likelihood and timing of future monetary policy easing.
Afternoon Trading Activity and Sector Performance
The afternoon trading session saw a clear divergence in performance across sectors. While the overall market was pressured by the inflation report, a significant portion of the S&P 500 components, specifically three out of every four stocks, registered declines. However, the impact of these losses was largely masked by the continued strength of a few "Big Tech" giants. Companies like Amazon (AMZN), Nvidia (NVDA), Microsoft (MSFT), Alphabet (GOOGL), Meta Platforms (META), and Broadcom (AVGO) saw gains, with Amazon notably rising over 2% following news of expanded same-day grocery delivery services. These tech behemoths, particularly those benefiting from the artificial intelligence (AI) boom, have been responsible for a substantial portion of the S&P 500's year-to-date appreciation, highlighting a concentrated market rally.
Conversely, the broader market experienced a "sector churn," with a visible shift away from some growth-oriented technology stocks towards cyclical sectors on Wednesday. On that day, 10 out of 11 S&P 500 sectors closed in positive territory, with Materials Select Sector SPDR (XLB), Health Care Select Sector SPDR (XLV), Energy Select Sector SPDR (XLE), and Consumer Discretionary Select Sector SPDR (XLY) showing particularly strong gains. Today, however, chip stocks like ON Semiconductor (ON), Microchip Technology (MCHP), and NXP Semiconductors (NXPI) retreated, each dropping over 2%.
Important Upcoming Market Events
The financial calendar remains packed with events that could significantly sway market direction. The most immediate focus for investors is the Federal Reserve's upcoming Federal Open Market Committee (FOMC) meeting in September. Despite today's elevated PPI figures, market participants still anticipate a 25-basis-point interest rate cut. Before the PPI release, some even speculated about a 50-basis-point reduction, fueled by recent signs of a cooling labor market and moderating inflation. The Fed's July meeting saw rates held steady, and officials are balancing their dual mandate of price stability and maximum employment. The Personal Consumption Expenditures (PCE) index, another key inflation gauge closely watched by the Fed, is due later this month, around August 29th.
Beyond economic data, geopolitical developments are also on investors' radar. A key meeting between U.S. President Donald Trump and Russian President Vladimir Putin is scheduled for Friday, August 15th, and its outcome could introduce further market volatility.
Major Stock News and Corporate Announcements
Several major public companies made headlines today with their latest earnings reports and corporate announcements:
- Deere (DE) saw its shares fall between 6% and 7.7% after the agricultural machinery maker cut its full-year net income forecast, despite reporting better-than-expected quarterly profit.
- Tapestry (TPR), the parent company of Coach and Kate Spade, tumbled significantly, losing 14.2% to 15% of its value. This steep decline was attributed to pressure from tariffs and a disappointing profit forecast for the upcoming fiscal year, overshadowing stronger-than-expected Q2 earnings.
- Amazon (AMZN) was a standout performer, climbing 2.2% to 2.3% following its announcement of expanding same-day fresh grocery delivery to over 1,000 cities and towns. Given its massive market capitalization, Amazon's performance significantly influences the broader S&P 500.
- Fossil Group (FOSL) experienced a substantial jump of 17.1% after the watch and accessories seller reported better-than-expected profit and unveiled plans to strengthen its finances.
- In other earnings news, Brinker International Inc. (EAT) shares rose 1.6% on strong Q4 fiscal 2025 revenues, while Arcos Dorados Holdings Inc. (ARCO) jumped 9.8% after beating Q2 2025 revenue estimates.
- Conversely, CAVA Group Inc. (CAVA) plunged 16.6% after missing Q2 2025 revenue estimates, and CoreWeave Inc. (CRWV) plummeted 20.8% after reporting a wider-than-expected adjusted loss per share for Q2 2025.
- Rigetti Computing Inc. (RGTI) reported a narrower adjusted loss but missed revenue forecasts for Q2 2025.
- Advance Auto Parts (AAP) saw its shares fall, despite beating EPS and meeting revenue consensus.
- Dillard's (DDS) climbed 4% after a strong earnings report.
- Cisco Systems (CSCO) slipped after hours following a narrow Q4 beat.
- Ibotta (IBTA) plunged 23% after missing earnings targets, and Coherent (COHR) fell 18% despite beating estimates, citing a defense division sale.
- Tesla (TSLA) and Apple (AAPL) also ticked lower during the day.
In summary, the U.S. stock market on Thursday, August 14th, 2025, navigated a challenging afternoon, with a surprising surge in wholesale inflation data dampening the optimism that had propelled indexes to record highs just a day prior. While a handful of mega-cap tech stocks continued to show resilience, the broader market experienced declines, reflecting investor caution regarding the Federal Reserve's path forward on interest rates and the potential impact of persistent inflation. The coming weeks, with further economic data and geopolitical discussions, will be crucial in shaping the market's trajectory.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.