Nasdaq Shrugs Off PPI Report, Crude Oil Rises, Bonds Drop

Also 30-year T-Bond, Silver, Crude Oil, and Japanese Yen Futures 

1. Nasdaq 100 E-mini futures

1. 30-year T-Bond futures (/ZB): -0.32%

1. Silver futures (/SI): -1.20%

1. Crude Oil futures (/CL): +1.12%

1. Japanese Yen futures (/6J): -0.02%

Market focus has been centered on rate cut bets for September, but this morning’s inflation data threw a wrench into the mix when PPI data came in hotter-than-expected, prompting traders to cut bets for the September meeting. Fed Funds futures continue to price in a high chance for a September cut, but the chance for a larger cut was mostly removed from the equation. The producer price index (PPI) rose 0.9% in July from the month prior which saw no change. The dollar and oil prices rose, while bond yields moved higher. Small-cap stocks were most effected, seemingly because of the sensitivity smaller companies have to interest rates.  

The stronger-than-expected PPI report sent stocks lower Thursday morning, although technology stocks remained resilient versus the rest of the market, with Nasdaq futures (/NQU5) rising 0.19% after the first hour of trading. The move lower comes after prices made record highs in the past two trading sessions. Cisco Systems (CSCO) was 0.3% lower after trimming earlier losses following disappointing guidance for the company. JD.com (JD) fell 3% despite beating revenue targets. Tapestry, Inc (TPR) saw a 16% loss in early trading after missing earnings estimates. Deere & Company (DE) fell 6% after the company cut its full-year guidance.  

Bonds fell across the board after the wholesale inflation report crossed the wires, pushing yields higher as rate traders readjusted their rate cut bets. While Fed Funds futures still see a 90% chance for a rate cut next month, the chance for a 50 basis point cut disappeared. The data also points to an economy that could stagnate alongside higher inflation through the rest of the year. 30-year T-Bond futures (/ZBU5) fell 0.30% an hour into the New York trading session. However, jobless claims showed that the labor market remains relatively stable. Tomorrow’s retail sales data could provide more info for directional bond traders.  

Silver prices (/SIU5) fell 1.6%, retracing most of yesterday’s gains. Today’s drop puts prices back at the 21-day exponential moving average, which has offered some support for prices over the past week of trading. A break below the EMA would put the 50-day simple moving average (SMA) into focus, which supported prices in late July following an extended selloff.  

Crude oil prices (/CLU5) moved higher Thursday, rising about 1.3% an hour into U.S. trading. Prices fell to the 62 handle yesterday but recovered some of its losses by the end of the trading session. Still, oil prices are down sharply from the start of the month, as economic concerns dampen sentiment for the commodity. The Energy Information Administration, earlier this week, said that oil production would fall in 2026, which would mark the first drop in production since 2021. Data from the government agency also showed that commercial crude oil stocks rose 3 million barrels for the week ending August 8. Supply fears have eased over the past month as global economic activity has cooled, evidnenced by a drop in the prompt spread, which has given up about 40 cents of backwardation since the start of the month. All eyes are on the meeting in Alaska today where President Trump and President Putin are slated to discuss a path toward peace in Ukraine. President Trump has threated Russia with secondary tariffs on countries that purchase Russian crude.  

Japanese Yen futures (/6JU5) were higher early Thursday but surrendered gains to trade negative after U.S. inflation data crossed the wires. The Yen was performing well overnight after Treasury Secretary Scott Bessent suggested that Japan is falling behind the curve in tackling the country’s inflation. However, the inflation data eased the pace of expected rate cuts, which hurt the Yen and supported the dollar.  

Christopher Vecchio, CFA, tastylive’s head of futures and forex, has been trading for nearly 20 years. He has consulted with multinational firms on FX hedging and lectured at Duke Law School on FX derivatives. Vecchio searches for high-convexity opportunities at the crossroads of macroeconomics and global politics. He hosts Futures Power Hour Monday-Friday and Let Me Explain on Tuesdays, and co-hosts Overtime, Monday-Thursday. @cvecchiofx

Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater

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