US stocks erased gains earlier in the session to close mixed Thursday after data showed that monthly producer prices dropped for the first time in more than two years.
The Dow Jones Industrial Average rose 0.1% to 33,336.67, while the S&P 500 edged 0.1% lower to 4,207.32. The Nasdaq Composite was 0.6% lower at 12,779.91. Energy and financials led the gainers while the healthcare sector was the steepest decliner.
West Texas Intermediate jumped 2.2% to $93.94 a barrel.
The US10-year yield rose 11.2 basis points to 2.89%.
On Thursday, the producer price index, or PPI, fell by 0.5% in July following a 1% rise in June, below the 0.2% gain expected in a survey compiled by Bloomberg. Energy prices plunged 9% in the month, while food prices advanced 1%.
Data showed on Wednesday that the pace of US consumer price growth slowed more than expected in July while the monthly print was flat.
The probability of the Federal Reserve lifting interest rates by 75 basis points at its Sept. 21 policy meeting fell to 40.5% on Thursday from 42% on Wednesday, according to the CME FedWatch Tool. The chance of a 50 basis-point increase marched up to 59.5% from 58%.
"While market participants are hailing the latest inflation data as evidence price pressures have peaked and the Fed should take a more benign approach to policy, other categories of prices or measures of inflation do not offer the same conclusion," Stifel Nicolaus Chief Economist Lindsey Piegza said, pointing to higher housing and food costs.
In other economic news, the seasonally adjusted number of initial US unemployment claims climbed 14,000 to 262,000 during the week ended Aug. 6, the Department of Labor said Thursday. The consensus on Econoday was 260,000.
Home prices appreciated by double digits in 80% of US metro markets in Q2, up from 70% in Q1, the National Association of Realtors said in a report Thursday.
In company news, Walt Disney (DIS) expects its Disney+ streaming service to add more paid viewers in the current quarter, while an ad-supported subscription tier set to roll out by the end of the year will boost earnings. Shares jumped 4.7%, among the top performers on the Dow and the S&P 500.
Sanofi (SNY), GSK (GSK) and Pfizer (PFE) shares fell Thursday amid growing concerns about US litigation surrounding Zantac, a heartburn drug, for allegedly causing cancer, according to media reports. There is an upcoming Illinois case on Aug. 22 and some key court trials in early 2023 against the drugmakers and the damages could possibly reach $10.5 billion to $45 billion, according to Morgan Stanley analysts, Bloomberg reported.
Sanofi slid 3.9%, GSK fell 8.1%, Pfizer was down 3.3%, and GSK's consumer health business spin-off Haleon (HLN) fell 3.4% while Johnson & Johnson (JNJ) dropped 2.1%.
Gold was down 0.7% to $1,801.60 per troy ounce, and silver was down 2.5% to $20.23 per ounce.