S&P 500 and Russell 2000 Close at Records as Flat July PPI Trims September Hike Bets

by Jonathan Mercer · August 13, 2026

Chief Markets Correspondent, US Market Current

The S&P 500 closed at a record 7,798.99 on Thursday, up 0.65 percent, and the Russell 2000 finished at a record 3,052.85, up 0.24 percent, after the Bureau of Labor Statistics reported that wholesale prices were unchanged in July. The Nasdaq Composite added 0.81 percent to 26,803.03 and the Dow Jones Industrial Average rose 0.13 percent to 53,839.99, according to Kitco's post-close market report and The Motley Fool's Thursday market wrap. The gains extended a two-day rally that began with Wednesday's July consumer price report and pushed the broad market through 7,800 intraday for the first time.

The trigger was the July producer price index, released by the BLS at 8:30 a.m. Eastern. Final demand was flat on a seasonally adjusted basis, below the 0.2 percent increase economists had penciled in, and rose 4.7 percent over the 12 months through July. The BLS release attributed the softness largely to energy: prices for final demand energy fell 3.1 percent, with the agency noting that a 5.7-percent decline in prices for gasoline accounted for a large share of the 0.7 percent drop in final demand goods. Final demand services edged up 0.2 percent.

Bond markets took the print as permission to unwind some of the rate-increase risk that had built into the curve. The 10-year Treasury yield fell to 4.648 percent from 4.686 percent on Wednesday, Kitco reported. Pricing in fed funds futures moved with it: Kitco, citing the CME FedWatch tool, put the probability of a September rate hike at 34.6 percent after the release, down from 40.6 percent beforehand. The Motley Fool's wrap described a larger slide over the course of the week, from roughly 55 percent to under 35 percent.

The direction of that repricing is worth stating plainly, because it runs opposite to the reflex most investors carry from prior cycles. The Federal Open Market Committee has held its target range at 3.50 percent to 3.75 percent since its July 28-29 meeting, and the contested question in front of it is whether to raise rates again, not whether to cut. Three policymakers dissented at that meeting in favor of a quarter-point increase, according to U.S. Bank's summary of the decision. Thursday's rally was therefore not a bet on easing. It was a bet that the hawkish minority stays a minority.

That distinction matters for the small-cap index, though not in the direction the day's headlines implied. The Russell 2000 carries a heavier weighting in domestically focused companies and lenders whose liabilities reprice with short-term rates, which makes the index unusually sensitive to shifts in the front end of the curve. Even so, its 0.24 percent gain trailed both the S&P 500 and the Nasdaq on Thursday, so the record close narrowed the small-cap performance gap rather than extending it. Heading into Thursday the index had already logged 27 record closes in 2026 and was up 22.7 percent for the year against 13.2 percent for the S&P 500, according to a pre-market analysis published by ts2.tech before the session began.

Single-stock action was dominated by a takeover report. Workday shares jumped about 18 percent after Reuters reported that Silver Lake was in talks to take the human-resources and finance software company private; the stock was halted at one point during the surge, CNBC reported. Harmonic rose roughly 9 percent after reporting results above expectations and lifting guidance, per The Motley Fool. On the other side, Cisco Systems fell 9.3 percent and was the single biggest drag on the Dow, subtracting roughly 68 points from the index, after gross margins were squeezed by soaring memory costs and a less lucrative hardware mix in its fiscal fourth quarter, The Motley Fool reported. Micron Technology sat at the other end of that same supply chain and gained 5.1 percent; Schaeffer's Investment Research also named it among the day's AI-infrastructure leaders. Cerebras Systems fell sharply after a quarterly loss and a cautious view on AI chip revenue.

The labor data released alongside the PPI report was the one soft spot. Initial claims for unemployment insurance rose to a seasonally adjusted 209,000 in the week ended Aug. 8, an increase of 9,000 from the prior week's revised 200,000, the Labor Department said. The four-week moving average was unchanged at 199,000. Continuing claims for the week ended Aug. 1 fell to 1,777,000, with a four-week average of 1,785,500 and an insured unemployment rate of 1.2 percent. The pattern remains a low-firing, low-hiring market rather than one shedding jobs.

Commodities moved the other way. West Texas Intermediate crude for September delivery settled 2.4 percent lower at $81.25 a barrel, Schaeffer's reported, as conflicting U.S. and Iranian claims over control of the Strait of Hormuz pulled the risk premium out of the front of the curve. Brent settled at $87.07, down 2.1 percent, according to Kitco. Precious metals snapped their advance: Kitco put gold at $4,349.80 an ounce, down 1.31 percent, and silver at $64.290, down 1.40 percent, with lower energy prices and profit-taking outweighing the drop in yields. Schaeffer's cited a higher gold level for the session, $4,423.60, down about 1 percent, so the precise print depends on the contract and source used.

After the closing bell, Applied Materials reported fiscal third-quarter revenue of $9.12 billion, ahead of the $8.99 billion consensus, and adjusted earnings of $3.50 a share against $3.40 expected, according to Benzinga. The company guided fourth-quarter revenue to $10.25 billion plus or minus $500 million, well above the roughly $9.54 billion analysts had modeled. Chief Executive Gary Dickerson said in the release that "Applied Materials delivered another record-breaking quarter, including the highest sequential revenue growth in the company's history." The stock nonetheless fell about 3 percent in extended trading to $517.78.

For all the record levels, Thursday's session did not resolve the central argument. Headline wholesale inflation was flat, but the measure that strips out foods, energy and trade services rose 0.4 percent on the month and held at 4.7 percent on the year, which is not a disinflationary reading by any standard the Fed applies. The other core gauge, which excludes only foods and energy, did cool, to 0.2 percent on the month and 4.2 percent on the year from 4.7 percent in June. Energy did the work at the headline, and energy is precisely the component that geopolitical events can reverse in a week.

The near-term calendar is dense. July retail sales are due Friday morning at 8:30 a.m. Eastern, per the Census Bureau's schedule, and will test whether the consumer is still absorbing higher goods prices. Minutes from the July FOMC meeting arrive Aug. 19 and should show how close the three dissenters came to persuading the rest of the committee. Core PCE, the Fed's preferred inflation gauge and the measure that ingests the wholesale services data released Thursday, is scheduled for Aug. 26.