Opening Comment — Wednesday, July 16, 2025
DJIA: 44,023.29, down 436.36
S&P 500: 6,243.76, down 24.80
NASDAQ: 20,677.80, up 37.47
Stocks lower ahead of PPI data
Stock futures are mostly lower Wednesday morning following President Donald Trump announcing that tariffs on pharmaceutical goods and semiconductor imports could potentially come into effect as soon as August 1. Investors are also looking forward to June’s Producer Price Index (PPI) and industrial production data, along with the Federal Reserve’s (Fed’s) Beige Book survey of regional economic conditions. As of 7:17 AM ET, the Dow is little changed, while the S&P 500 is down 0.1%. The Nasdaq 100 is falling 0.2% relative to fair value on the GLOBEX.
U.S. equities were mixed on Tuesday as the June Consumer Price Index (CPI) accelerated in line with expectations on a headline basis to a 2.7% year-over-year (YOY) increase. Meanwhile, the core CPI (which excludes food and energy) came in cooler than expected month-over-month (MOM) as it accelerated to 2.9% YOY. The Dow was down 1.0%, while the tech-heavy Nasdaq Composite rose 0.2%. The S&P 500 decreased 0.4% with 10 of 11 sectors finishing in negative territory. The Information Technology sector was the top performer, rising 1.3%, while the Materials sector was the bottom performer, falling 2.1%.
On the data front, the Mortgage Banker Association’s gauge of mortgage applications increased by 10.0% for the week ending July 11 versus the prior week’s increase of 9.4%. The headline PPI for June is expected to show price increases of 0.2% MOM and 2.5% YOY versus the prior month’s increases of 0.1% and 2.6%, respectively. The core PPI is expected to show price increases of 0.2% MOM and 2.7% YOY versus the prior month’s increases of 0.1% and 3.0%, respectively. The New York Fed will release their Business Leaders Survey for July. Industrial production is forecasted to have increased 0.1% MOM in June versus the prior month’s decrease of 0.2%, while capacity utilization is forecasted to remain steady at 77.4%. The Department of Energy’s measure of crude oil inventories for the week ending July 11 will be released today.
Across the pond, European stocks are higher in mid-day trading as the U.K.’s CPI unexpectedly accelerated in June, with the headline and core readings showing increases of 3.6% and 3.7% YOY, respectively. Meanwhile, the country’s June Retail Price Index also came in hotter than projected. The eurozone’s trade surplus widened in May.
Overnight in Asia, stocks were mixed as South Korea’s Export Price Index registered decreases of 1.1% MOM and 4.5% YOY in June, while the Import Price Index fell by 0.6% MOM and 6.2% YOY. Meanwhile, the country’s unemployment rate ticked down to 2.6% in June.
In FOREX trading, the dollar is slightly lower ahead of today’s U.S. PPI data release.
Over in the commodity pits, West Texas Intermediate (WTI) crude oil is 0.2% lower at $66.36/barrel.
In the metals complex, gold is 0.3% higher at $3,346.20/ounce following a weakening dollar.