Stock Market Update

The stock market is now on track for a modestly higher opening as a hotter-than-expected April PPI report weighs against some dip-buying interest across tech names.

The producer price index for final demand surged 1.4% month-over-month (Briefing.com consensus: 0.4%) following an upwardly revised 0.7% increase (from 0.5%) in March. That was the largest advance since March 2022 and nearly 60% of the increase was attributed to a 1.2% advance in the index for final demand services. Excluding food and energy, the index for final demand jumped 1.0% (Briefing.com consensus: 0.3%) on the heels of an upwardly revised 0.2% increase (from 0.1%) in March.

Here is the headline, though, that will be the topic of conversation. The producer price index for final demand was up 6.0% year-over-year versus 4.3% in March, while the index for final demand, excluding food and energy, was up 5.2% versus 4.0% in March.

The key takeaway from the report is that the surge in producer prices in April wasn't just energy-related. That surge accounted for the bulk of the 2.0% increase in the index for final demand goods, but two-thirds of the "broad-based advance" in the index for final demand services was attributed to a 2.7% increase in margins for final demand trade services.