US equities are pulling back from their recent record highs at midday on Thursday, August 14, 2025, as a hotter-than-expected Producer Price Index (PPI) report for July has tempered investor optimism regarding aggressive interest rate cuts by the Federal Reserve. This shift in sentiment marks a pause in the bullish momentum that propelled major indexes to new peaks earlier in the week.
Midday Market Performance and Momentum
As of midday trading, the major U.S. stock indexes are in negative territory. The S&P 500 Index (SPX) is down 0.24%, while the Dow Jones Industrial Average (DJI) has declined by 0.36%. The tech-heavy Nasdaq Composite Index (IXIC) is also lower by 0.3%, with the Nasdaq 100 Index (IUXX) seeing a 0.11% dip. This midday retreat follows a strong performance on Wednesday, where all three benchmarks closed higher, with the S&P 500 and Nasdaq Composite hitting new closing highs for the second and fourth consecutive sessions, respectively. The Dow Jones Industrial Average gained a notable 1% on Wednesday, closing at 44,922.27, bringing it within striking distance of its December 2024 all-time high.
The primary catalyst for today's midday downturn is the July Producer Price Index (PPI) data, which came in stronger than economists had anticipated. The final demand PPI rose 0.9% month-over-month and 3.3% year-over-year, while the core final demand PPI, excluding volatile food and energy, increased 0.9% month-over-month and 3.7% year-over-year. This inflation reading has prompted traders to reconsider the widespread consensus that the Federal Reserve would deliver a substantial interest rate cut as early as September. While markets are still assigning a 93% chance of a 25-basis-point rate cut at the September 16-17 FOMC meeting, comments from San Francisco Fed President Mary Daly have reportedly thrown cold water on the idea of a more aggressive 50-basis-point cut.
Wednesday's trading saw a notable sector rotation, with market participants shifting preferences from growth-oriented technology stocks to cyclical stocks. Small-cap stocks, as measured by the Russell 2000 Index, also performed strongly on Wednesday, gaining 2.0% as investors piled into riskier assets, anticipating relief from lower financing costs. However, today's inflation data has introduced fresh uncertainty, leading to profit-taking across the board.
Upcoming Market Events
Investors are closely monitoring a series of economic data releases and corporate earnings reports in the coming days and weeks that could further influence market direction.
Today (August 14, 2025): Beyond the impactful PPI report and weekly jobless claims, which showed a slight decrease to 224,000, no other major U.S. economic data is scheduled.
Tomorrow (August 15, 2025): Key economic indicators to watch include the July Advance Retail Sales, the Empire State Manufacturing Survey, Imports and Exports data, Industrial Production and Capacity Utilization, and Business Inventories. Additionally, the preliminary August University of Michigan Consumer Sentiment index will be released, providing insights into consumer confidence. In corporate earnings, Applied Materials (AMAT), a prominent semiconductor equipment manufacturer, is expected to report its results after the market closes.
Next Week and Beyond:
- August 19: July housing starts and building permits data will be released. Major earnings reports are anticipated from Home Depot (HD) and Medtronic (MDT).
- August 20: The release of the Federal Open Market Committee (FOMC) minutes will provide further insight into the Fed's recent policy discussions and future outlook.
- August 21: Retail giant Walmart (WMT) is scheduled to host its second-quarter earnings conference call.
Major Stock News and Corporate Announcements
Several prominent companies are making headlines today due to earnings reports, corporate announcements, or significant stock movements:
- Deere & Co. (DE): Shares of the agricultural machinery giant have dropped significantly, down 7.5% to 8% at midday. This decline follows the company's decision to cut its full-year forecast, despite reporting third-quarter sales and profit that beat Wall Street's targets. Deere cited "near-term uncertainty" and a focus on inventory management as contributing factors.
- Tapestry (TPR): The parent company of Coach and Kate Spade New York, saw its shares tumble between 6% and 15% at midday. The sharp decline is attributed to a weak outlook for fiscal year 2026, with the company warning of a significant negative impact from new tariffs. Tapestry anticipates fiscal 2026 earnings per share of $5.30 to $5.45, which includes over $0.60 in negative impact from incremental tariffs and duties. While Coach sales jumped 14% year-over-year, Kate Spade and Stuart Weitzman sales experienced declines.
- Cisco Systems (CSCO): The networking giant reported quarterly results that narrowly surpassed analysts' expectations, with revenue increasing 8% year-over-year to $14.7 billion. Cisco's CEO indicated potential for further gains, particularly as the company capitalizes on growing demand for AI infrastructure, with AI infrastructure orders doubling to over $2 billion.
- Bullish (BLSH): The cryptocurrency exchange is continuing its upward trajectory, surging 10% in premarket trading today after a strong debut on the New York Stock Exchange on Wednesday, where its shares nearly doubled their initial public offering price of $37.
- Paramount Skydance (PSKY): The newly merged company's shares saw a significant surge of nearly 40% on Wednesday, drawing investor attention.
- CoreWeave: The company experienced a 21% slump in its stock after providing a disappointing earnings outlook, citing margin pressures stemming from its rapid expansion of AI data centers.
- dLocal Ltd (DLO): The Uruguayan-based fintech company is up 22.8% at midday, reaching a 52-week high, following a strong second-quarter earnings report that exceeded expectations.
- Reddit Inc (RDDT): The social media platform's stock is performing well today, up 3.1% at midday and hitting a new record high. This continues a strong performance for Reddit, largely driven by a post-earnings bull gap earlier in the month.
- Enphase Energy Inc (ENPH): Shares of the solar energy company are down 6.5% at midday, contributing to a broader decline in alternative energy stocks amid reports of stricter wind and solar tariffs.
- Magnificent Seven Stocks: Performance among the mega-cap technology stocks is mixed at midday. Tesla (TSLA) is down 2.5%, while Nvidia (NVDA) and Apple (AAPL) have also lost ground. Conversely, Amazon (AMZN) is up approximately 2%, and Microsoft (MSFT), Alphabet (GOOGL), Meta Platforms (META), and Broadcom (AVGO) are showing slight gains.
Today's trading session highlights the market's sensitivity to inflation data and its implications for future monetary policy. While strong corporate earnings continue to provide underlying support, the hotter-than-expected PPI report has introduced a degree of caution, leading to a midday retreat from recent record highs. Investors will be closely watching upcoming economic data and Fed communications for further clarity on the path of interest rates.
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.