Softer PPI Fuels Growth Stocks as S&P 500 Breaks 7,800 for New Record

Stocks advanced on Thursday as softer-than-expected producer inflation further eased concerns about additional Federal Reserve tightening, while renewed strength across mega-cap technology propelled the S&P 500 into fresh record territory. The S&P 500 gained 0.7%, crossing the 7,800 level for the first time and establishing new intraday and closing highs. The Nasdaq Composite outperformed with a 0.8% advance, while the Dow Jones Industrial Average eked out a 0.1% gain.

The July Producer Price Index provided another encouraging inflation signal. Headline PPI was unchanged for the month, below the Briefing.com consensus estimate for a 0.1% increase, while core PPI rose 0.2%, also below the 0.3% consensus forecast. Both readings came in slightly softer than expected despite modest upward revisions to the prior month’s figures.

Coming one day after an in-line CPI report, the PPI data reinforced the market’s increasingly favorable view of the monetary policy outlook. Fed funds futures reflected the shift, with the CME FedWatch Tool assigning a 34.6% probability to a 25-basis-point rate hike at the September FOMC meeting, down from 40.6% immediately before Thursday’s PPI release and 55.0% one week ago.

The friendlier rate backdrop helped fuel another strong showing from growth stocks. Information technology gained 1.0% and finished among the market’s leaders, with memory stocks driving much of the early strength following positive takeaways from Sandisk’s investor day.

Sandisk (SNDK 1528.11, +183.82, +13.67%) and Western Digital (WDC 487.29, +33.19, +7.31%) ranked among the strongest-performing S&P 500 components. SK hynix (SKHY 165.65, +11.24, +7.28%) extended its August rebound and moved back toward its $170 July 10 IPO opening price after falling to post-IPO lows late last month.

The semiconductor rally lost considerable momentum during the afternoon, however. The PHLX Semiconductor Index finished just 0.5% higher after gaining more than 2.0% earlier in the session. Coherent (COHR 327.35, -28.29, -7.95%) was a notable laggard following its earnings report.

As semiconductor momentum faded, buying accelerated across software stocks, pointing to an intraday rotation within the technology sector rather than a broader retreat from growth. The iShares Expanded Tech-Software ETF (IGV) surged 3.1%, helped by an impressive rally in Workday (WDAY 206.45, +31.16, +17.78%) after Reuters reported that Silver Lake is in talks to acquire the company.

Mega-cap stocks also returned to a leadership role following Wednesday’s weaker showing. Communication services climbed 1.6% to lead all S&P 500 sectors, with Meta Platforms (META 594.97, +16.12, +2.78%) ranking among the strongest “Magnificent Seven” names. Netflix (NFLX 78.24, +4.03, +5.43%) also rallied following reports that Bill Ackman’s Pershing Square established a new position in the company.

Real estate gained 1.3% and finished among the day’s strongest sectors as Treasury yields moved lower in response to the inflation data. Falling yields provided additional support to rate-sensitive stocks and complemented the renewed buying across growth-oriented areas of the market.

Oil prices provided another favorable influence, although trading in crude remained choppy throughout the session. With no major new geopolitical catalyst, swings in oil contributed to the major averages briefly retreating from their opening highs before equities regained momentum during the afternoon. WTI crude ultimately settled $2.20 lower, or 2.6%, at $81.06 per barrel. Despite the sizable decline in crude, the energy sector slipped just 0.1%.

Materials was the weakest S&P 500 sector, falling 0.7% amid declining precious metals prices and weakness across fertilizer producers.

Thursday’s advance extended the market’s constructive response to this week’s inflation data. An in-line CPI report followed by softer-than-expected producer prices further reduced expectations for additional Fed tightening, helping propel the S&P 500 through the 7,800 milestone and into record territory.

Just as importantly, the afternoon rotation from semiconductors into software demonstrated that investor appetite for technology remained intact even as the early chip rally faded. With Treasury yields and oil prices moving lower and mega-cap growth stocks returning to leadership, the broader backdrop remained supportive as the S&P 500 closed Thursday at another all-time high.

Our FTInvest 11 model portfolio edged higher by 0.18% to close at 1,054.60, recovering a small portion of the previous session’s decline. The modest advance provided some stabilization following Wednesday’s sharper pullback, while the portfolio remains comfortably above the 1,000 level and approximately 3.8% below its all-time closing high of 1,096.33.

FTInvest 11 is now up approximately +13.62% year-to-date, maintaining a strong double-digit return for 2026. Recent trading continues to reflect a period of consolidation following the portfolio’s powerful summer recovery and record-setting run in July. Despite short-term fluctuations, FTInvest 11 continues to preserve a substantial portion of its gains while maintaining its disciplined, value-driven focus on long-term capital appreciation.