BEIJING 鈥� Stocks ended another choppy day of trading mixed, leaving the market with its second losing week in a row. Investors pored over reports on inflation and consumer sentiment seeking clues about the Federal Reserve鈥檚 next move on interest rates. The government reported a slight increase in inflation in wholesale prices last month, which could persuade the Fed that its work on bringing inflation to heel isn鈥檛 done. The University of Michigan鈥檚 preliminary August survey showed consumer sentiment fell slightly. The S&P 500 fell 0.1% Friday. The Dow rose 105 points, or 0.3%, and the Nasdaq fell 0.7%.
THIS IS A BREAKING NEWS UPDATE. AP鈥檚 earlier story follows below.
Stocks are mixed on Wall Street in afternoon trading Friday, as investors reviewed new reports on inflation and consumer sentiment for potential clues about the Federal Reserve's next move on interest rates.
The S&P 500 was up less than 0.1% after spending much of the day wavering between small gains and losses. The benchmark index is still on pace for its second losing week in a row.
The Dow Jones Industrial Average was up 133 points, or 0.4%, at 35,308, as of 3 p.m. Eastern time. The Nasdaq composite was 0.5% lower, reflecting a pullback in big tech companies.
Stocks lost ground in the early going after the Labor Department reported Friday that its , which measures inflation before it hits consumers, rose 0.8% last month from July 2022. The latest figure followed a 0.2% year-over-year increase in June, which had been the smallest annual rise since August 2020.
While modest, the increase in wholesale prices last month could help persuade the Federal Reserve that its work on bringing inflation to heel isn鈥檛 done.
鈥淣ot surprisingly, today鈥檚 report offers the hawkish wing of the Fed more ammunition to advocate for another rate hike before the Fed is convinced it鈥檚 reached its terminal rate,鈥� said Quincy Krosby, chief global strategist for LPL Financial.
Bond yields mostly rose, including the two-year Treasury yield, which climbed to 4.88%. The yield, which closely tracks expectations for the Fed, had been at 4.80% right before the report鈥檚 release. The yield on the 10-year Treasury rose to 4.16% from 4.10% late Thursday. It helps set rates for mortgages and other important loans.
The majority of traders on Wall Street are still betting the central bank will make no change to the fed funds rate at its policy meeting next month, according to data from CME Group. Even so, the bond market鈥檚 reaction is a signal that investors think the Fed will probably raise interest rates, said Sam Stovall, chief investment strategist at CFRA.
鈥淚nvestors are still sort of weighing, 鈥榳ill they or won鈥檛 they in September?鈥欌�� he said. "Uncertainty abounds.鈥�
The wholesale prices data follows Thursday鈥檚 release of the government鈥檚 consumer price index, which showed than a year earlier. That鈥檚 a touch milder than the 3.3% inflation rate economists expected to see and down sharply from last summer鈥檚 peak above 9%. Underlying trends for inflation were also within expectations.
By all measures, inflation has cooled over the past year, though it remains above the Fed鈥檚 2% target level. The moderating pace of price increases, combined with a resilient job market, has raised hopes that the Fed may achieve a difficult 鈥渟oft landing鈥�: Raising rates enough to slow borrowing and tame inflation without causing a painful recession.
Such hopes helped the S&P 500 rally a big 19.5% through the first seven months of the year, though critics say Wall Street too quickly formed a consensus that inflation is continuing to cool, the economy will avoid a recession and the Fed has already hiked rates for the final time this cycle.
The Fed has said it will make upcoming decisions on rates based on what data reports say, particularly those on inflation and the job market. Its main rate is already at its highest level in more than two decades.
Traders also weighed a preliminary reading in a that showed consumer sentiment down slightly from July, when it climbed to its highest level since October 2021. The latest consumer sentiment index was 71.2, down from 71.6 in July and below analysts' consensus forecast of 71.3, according to FactSet.
Among its findings, the latest survey found that consumers' expectations for inflation in the coming year edged lower. That's good news, as the Fed has been adamant about wanting to avoid a vicious cycle where expectations for high inflation drive behavior that only worsens it.
Investors also had their eye on the latest batch of quarterly earnings reports.
IonQ jumped 10.9% after the quantum computing technology company raised its full-year guidance after its fiscal second-quarter revenue topped Wall Street's forecasts.
Flowers Foods rose 4.1% after price increases helped drive the bakery goods maker's latest quarterly earnings and revenue, beating analysts' projections.
Traders hammered Cano Health, sending its shares 70.5% lower, after the chain of primary care medical centers reported quarterly results that fell short of Wall Street's estimates and said it believes its current liquidity isn't enough to cover the next 12 months.
Several major retailers are set to report quarterly results next week, including Home Depot on Tuesday, Target on Wednesday and Walmart on Thursday.
In stock markets abroad, indexes declined in Europe and Asia.
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AP Business Writer Joe McDonald contributed.
Alex Veiga, The Associated Press
