The Mid-Day Buzz

Sophia Reyes · August 14, 2025 11:33 AM

August 14^th, 2025

Stocks Slip as Hotter PPI Inflation Data Raises Concerns

U.S. equities opened lower Thursday after producer price index (PPI) data came in well above forecasts, signaling potential cost pressures for businesses. The Nasdaq lagged the S&P 500, while overseas markets posted modest gains.

The major gauges wobbled Thursday morning, with the Dow Jones Industrial Average (^DJI) down 0.4% and the benchmark S&P 500 (^GSPC) dropping 0.2%. Meanwhile, the tech-heavy Nasdaq Composite (^IXIC) decreased roughly 0.1%.

Economic Takeaways:

• Treasury yields climbed across the curve, with the short end reacting most to interest rate expectations. The 2-year yield rose 5 basis points to 3.72%, and the 10-year gained 3 basis points to 4.26%.
• July PPI rose 0.9% month-over-month, far exceeding the 0.2% forecast and last month’s flat reading. Services prices jumped 1.1%—driven by stronger trade services—while goods prices rose 0.7%, largely from food costs.
• Despite the hotter inflation print, markets still assign a 94% chance of a September Fed rate cut, per CME FedWatch. Odds for October and December cuts have eased slightly. The Jackson Hole Symposium (Aug. 21–23) could provide clues on the Fed’s policy trajectory.
• Bitcoin (/BTC) slipped 1.6% early Thursday after reaching a record above $125,000 overnight. Expectations for rate cuts continue to support the crypto sector. Treasury Secretary Scott Bessent indicated the US wouldn’t buy any more tokens for its reserve, but it wouldn’t sell any either.

PPI Surprise: Producer Inflation Hits 3-Year High in July

U.S. producer prices surged 0.9% in July—well above the 0.2% forecast—marking the largest monthly gain since June 2022. Core PPI rose 0.6%, the biggest jump since March 2022, pushing annual gains to 3.3%. Economists cite tariffs and rising margins for wholesalers as key drivers, with some costs likely to pass through to consumers. Despite the hotter data, markets still see a 95% chance of a September Fed rate cut ahead of Powell’s Jackson Hole speech next week.

Amazon Expands Same-Day Grocery Delivery to 2,300 Cities, Rattling Traditional Grocers

Amazon announced plans to expand its same-day fresh and perishable grocery delivery from 1,000 cities to 2,300 by year-end, signaling a major move in the grocery industry. Traditional grocers such as Albertsons (ACI) and Kroger (KR) saw their shares dip following the announcement.

While the impact won’t be immediate, Amazon’s expansion mirrors its disruptive influence on department stores in recent years, with aftershocks likely to ripple through the industry over time.

Evercore ISI analyst Michael Montani offered perspective this morning:

“While Amazon’s actions increase competitive intensity, we view the change as incremental within a relatively rational competitive backdrop. Consumers should benefit, as traditional grocers and some mass-market players will likely respond by reducing or eliminating delivery fees over time.

Membership programs like Kroger Boost and Albertsons FreshPass become increasingly important for driving loyalty and offsetting delivery costs. This mirrors what happened with curbside pickup fees 3–5 years ago—they largely disappeared.

Looking at the bigger picture, we see three mega themes shaping grocery in the second half of 2025: (a) value-seeking, as the gap between grocery and restaurant pricing continues to drive consumers toward food at home; (b) healthy eating, with demographic trends, social media, and initiatives like MAHA supporting 3–4% growth in ‘better-for-you’ products versus 2.5–3% in the broader grocery market; and (c) multichannel shopping, as our latest eCommerce survey shows consumers continue to prioritize convenience when choosing where to shop in the future.”

On the Move

• Cisco (CSCO) slipped 1% after posting earnings and revenue that narrowly beat analysts’ expectations. Fiscal first-quarter guidance came in close to market estimates. For the year, revenue grew 8% and gross margin landed near the top of Cisco’s projected range. Networking revenue rose 12%, slightly above forecasts, but analysts viewed management’s tone as cautious.
• Moderna (MRNA) gained 4.8% after Barron’s reported the administration appeared to take a softer stance on mRNA-based vaccines such as those produced by the company.
• Tapestry (TPR) dropped 11.2% in pre-market trading after warning that tariffs would significantly affect its outlook, despite quarterly earnings and revenue topping expectations.
• Oracle (ORCL) fell 3.8% after Bloomberg reported job cuts in its cloud infrastructure division.
• Homebuilder stocks stayed strong, with Lennar (LEN) and D.R. Horton (DHI) both up around 5%. Recent gains in home improvement and appliance makers—Home Depot (HD), Lowe’s (LOW), and Whirlpool (WHR)—may reflect optimism for lower interest rates. A 10% surge in mortgage applications last week could also be fueling momentum.
• Deere (DE) shares slid nearly 6% after cutting its full-year net income guidance, with the midpoint falling below analysts’ expectations. Third-quarter revenue and profit declined, but earnings topped estimates while revenue matched forecasts.
• com (JD) shares ticked up 0.2% after the Chinese e-commerce giant reported a year-over-year net income decline of more than 50%, driven by new investments in China’s competitive food delivery market. Revenue totaled 356.66 billion yuan ($49.73 billion), surpassing analyst expectations.
• Dillard’s (DDS) climbed 4% pre-market after delivering earnings well above consensus and revenue in line with forecasts. Same-store sales rose 1% year over year.
• The Russell 2000® (RUT) advanced nearly 2%, leading major indexes as small caps benefited from rate-cut optimism. Smaller companies, more reliant on borrowing and hit hard by tariffs, remain well below last fall’s highs.
• Bullish (BLSH) surged another 13% after soaring almost 84% in its debut as a public company Wednesday, with a rally in cryptocurrency-related stocks providing an additional boost, according to Barron’s.

What’s Ahead

Applied Materials (AMAT), a semiconductor equipment maker, reports this afternoon after missing analysts’ expectations on revenue in its fiscal second quarter.

Friday’s retail sales reading will serve as this week’s final economic data point.

Retail earnings pick up next week as big-box firms including Walmart (WMT) and Target (TGT) report.