Nasdaq 100: Tech Stocks Outperform Midday as Inflation Print Hits Dow, S&P Sentiment

U.S. equities saw a mixed session Thursday, with the Dow down 0.26%, as a hotter-than-expected July Producer Price Index (PPI) of 0.9% (vs. 0.2% forecast) triggered a jump in Treasury yields and prompted traders to scale back aggressive Fed rate cut expectations, though a 25-basis-point September cut remains highly probable. This shift in inflation sentiment positions the upcoming Jackson Hole symposium as critical for future policy signals. Concurrently, Miami International Holdings surged 43% post-IPO and crypto exchange Bullish gained 12%, while Tapestry plunged 15% on weak guidance and Advance Auto Parts fell over 9% after cutting its 2025 earnings outlook, highlighting varied sector performance amidst broader macroeconomic concerns.

Analysis

U.S. equity markets exhibited a clear divergence, with the Dow Jones Industrial Average falling 0.26% while the Nasdaq posted modest gains, driven by conflicting economic signals. A hotter-than-expected July Producer Price Index, which rose 0.9% against a 0.2% forecast, fueled a sell-off in the Dow and a spike in Treasury yields, with the 10-year note approaching 4.29%. This inflation data has recalibrated Federal Reserve rate cut expectations; while a 25-basis-point cut in September remains highly probable at 93%, according to CME's FedWatch tool, the possibility of a more aggressive 50-point cut has been eliminated. The upcoming Jackson Hole symposium is now a critical focal point for future policy direction. At the corporate level, performance was highly bifurcated. Strong investor appetite for financial infrastructure was evident in Miami International Holdings' 43% surge on its market debut and Bullish's continued 12% gain. Conversely, significant weakness emerged in consumer-facing and industrial sectors, with Tapestry (TPR) plummeting 15% on disappointing full-year guidance and Advance Auto Parts (AAP) falling over 9% after slashing its 2025 earnings outlook. The stark underperformance of Ibotta (-32%) and Coherent (-24%) on earnings and guidance further highlights a market environment where stock-specific fundamentals are driving significant price dispersion amid macroeconomic uncertainty.

Key Decisions for Investors

• Heighten scrutiny of the upcoming Jackson Hole symposium and incoming inflation data, as any hawkish pivot from the Federal Reserve could trigger further increases in bond yields and pressure on equities.
• Given the significant performance divergence between strong IPOs like Miami International Holdings and negative guidance from retailers like Tapestry, prioritize stock-specific fundamentals and earnings resilience over broad index exposure.
• Exercise caution with consumer discretionary stocks and auto parts retailers, as weak guidance from Tapestry and Advance Auto Parts may signal broader sector headwinds related to demand and cost pressures.
• Consider the strong performance of DLocal following its earnings beat and upgrade as a signal that companies demonstrating cost discipline and product momentum can significantly outperform in this headline-driven market.