By Teresa Rivas | Thursday, August 14

Some Things Gold Can Stay. A hot inflation report didn’t do much to dampen spirits on Wall Street. Stocks ended little changed on Thursday, a day after the S&P 500 and Nasdaq Composite notched back-to-back record highs. With its own small gain, the S&P 500 was even able to pull off a three-peat. 

The Dow Jones Industrial Average lost 0.2% while the Nasdaq Composite slipped 0.1%; the S&P 500’s 0.03% gain was enough to clinch its 18th record close of 2025.

Things looked much worse this morning, with stocks losing ground on the latest inflation reading. The producer price index spiked to a 0.9% monthly rate in July; that compares to economists' expectations for 0.2%. It's an unhappy contrast to Tuesday’s consumer price index, which held steady in July. 

That contrast “suggests that tariffs are causing inflation which adds lots of complexity to the Federal Reserve's potential rate cut plans this fall,” notes Clark Geranen, chief market strategist at CalBay Investments. “The fact that PPI was stronger-than-expected and CPI has been relatively soft suggests that businesses are eating much of the tariff costs instead of passing them onto the consumer. Businesses may soon start to reverse course and start passing these costs to consumers.”

That’s not particularly welcome news at any point, but it could do even more harm to stocks now, given that fall pullbacks are common for the market. With stocks trading at new highs and rich valuations, investors should be prepared.

“The large spike in the Producer Price Index (PPI) this morning shows inflation is coursing through the economy, even if it hasn’t been felt by consumers yet," adds Chris Zaccarelli, Chief Investment Officer for Northlight Asset Management. Nonetheless, the relatively muted response is good news: He noted that if stocks finished “the day flat or even higher then that’s a strong indication that the market doesn’t need rate cuts to keep moving higher.”

Plenty of bulls have been hoping that an interest rate cut is just weeks away. If the rally can carry on even without them, all the better.

DJIA: -0.02% to 44,911.26
S&P 500: +0.03% to 6,468.54
Nasdaq: -0.01% to 21,710.67

The Hot Stock: Intel Corporation +1.4%
The Biggest Loser: Tapestry, Inc. -15.7%

Best Sector: Health Care +0.5%
Worst Sector: Consumer Staples -0.9%

Happy Birthday?

Social Security turned 90 years old on Thursday, and some worry that it’s on its last legs. 

As my colleague Elizabeth O’Brien writes, the temporary tax break for seniors that Congress delivered as part of the One Big Beautiful Bill Act might be good news for today’s recipients but makes the question of long-term funding more urgent: The retirement trust fund is expected to run dry in 2033, about nine months earlier than projected last year.  

That doesn’t mean that coffers will go empty. As long as workers are paying in, there will be funds to distribute. However, those funds will be smaller -- recipients would see their benefits automatically cut by 23%.

Here's more from Elizabeth: 

There have been a variety of proposals floated to shore up Social Security, including by raising taxes on higher earners and raising the age at which people can claim full benefits, which is a de facto benefit cut. Sen. Bill Cassidy (R., Louisiana) has proposed borrowing $1.5 trillion to create a separate investment fund for Social Security that could be invested in stocks, whose profits would bolster the flagging trust fund.

That proposal could be considered a form of privatization. 

Treasury Secretary Scott Bessent made headlines in July when he likened the new Trump investment accounts for children as a “backdoor to privatizing Social Security.”

Those remarks received pushback from advocates. “Unlike private savings, Social Security is a guaranteed earned benefit that you can’t outlive,” said Nancy Altman, president of Social Security Works, at the time. “The American people have a message for Trump and Bessent: Keep Wall Street’s hands off our Social Security!”

Read the rest of Elizabeth's reporting here.