June PPI fell 0.2% MoM on a 12% gasoline drop. Core producer prices stayed sticky; the Strait of Hormuz closure keeps supply risks alive. Yields retreated.
Producer prices for June came in softer than expected. The headline PPI fell 0.2% month on month. Gasoline prices dropped 12%, accounting for most of the decline. Food prices were also a softer component, traders said.
The relief extended the disinflationary signal from Tuesday’s CPI report. The two reports share a common driver: lower energy costs. Core measures, stripping out food and energy, showed little cooling. Year-on-year producer price inflation remains elevated. That stickiness means falling gasoline alone may not bring overall inflation back to target.
Higher producer prices tend to feed into consumer prices with a lag. The situation is not helped by the de facto closure of the Strait of Hormuz. The US and Iran continue to exchange strikes. President Trump said Iran wants to meet and make a deal. His tolerance for the conflict appears tied to how oil and stocks react, the source noted.
Markets took the PPI data in stride. US equities posted modest gains. The S&P 500 rose 0.4%. The Nasdaq climbed 0.6%. US futures pointed to a slight gain of 0.1% at the time of writing. Traders said the data gave risk assets breathing room, even as the geopolitical backdrop remains uncertain.
Treasury yields retreated from recent highs. The 2-year yield fell to 4.15% from a peak near 4.30%. The 10-year yield settled around 4.55%. That retreat buys some time for equities, traders said. Yields are not breaking the boiling point just yet.
WTI crude traded little changed near $79.50 a barrel, holding just below the $80 mark. The buffer built over the past month has kept price moves contained so far. The next trigger is the Strait of Hormuz situation and any sharp change in oil supply.
European traders face a pensive open. The data has given them a reason to ease inflation worries. The core readings and the Strait of Hormuz closure are reminders that the path is not clear. WTI crude held at $79.50, and 2-year yields sat at 4.15% as the Tokyo session wound down. For more on how these dynamics affect currency pairs, see our forex market analysis.
Drafted by a large language model from the source reporting linked above, then screened by automated publishing checks. It is not read by a journalist before publication. Some articles cite our Alpha Score. Verify prices and figures against the original source. Educational coverage, not personalized advice.