S&P 500, Nasdaq drop; big tech weighs after US producer price data

The S&P 500 and Nasdaq dropped on Friday, heading for another weekly decline after hotter-than-expected U.S. producer prices data pushed Treasury yields higher and sank rate-sensitive megacap growth stocks, which weighed on the benchmark indexes.

The U.S. producer price index (PPI) climbed 0.8% in the 12 months leading to July, up from a 0.2% rise in the previous month, as costs of services increased. Economists polled by Refinitiv had expected a 0.7% gain.

Though traders broadly expect the Federal Reserve to refrain from tightening credit conditions for the rest of the year, bets for no rate hike in September slipped to 88.5% from 90% before the data landed. IRPR

“The PPI data shows that the inflation monster is still lingering but investors can see progress in the things that come under CPI,” said David Russell, vice president of market intelligence at TradeStation.

Yield on the two-year treasury note , that moves in line with near-term interest rate expectations, climbed to 4.88%. Tesla (TSLA.O), Alphabet Inc (GOOGL.O) and Microsoft (MSFT.O) shares lost between 0.4% and 1.1%.

A 3.2% fall in Nvidia (NVDA.O) weighed on the semiconductor index (.SOX), which was 2.2% lower, on course for its fourth straight decline and its eighth loss in nine sessions.

A close for the semis index, at its current level, would also mark the SOX’s biggest weekly loss since early April.

This report’s information was first seen on REUTERS; to read more, click this link.