Despite the jump in wholesale prices, S&P 500 futures clung to a gain of 0.2% in Asian trading, even as Nasdaq futures slipped for a third consecutive day. The yield on the U.S. 10-year Treasury bond was down 2 basis points at 4.2732%.
One consequence of the hot PPI print is that the market has given up on hopes of a jumbo 50 basis point rate cut from the Federal Reserve, according to the CME Group's FedWatch tool. But traders are still pricing in a 92.1% probability of a 25 basis point rate cut at its September meeting, compared with a 100% likelihood of a cut yesterday.
In Asia, data from the region's two biggest economies showed Japan's economy running hot last quarter to keep shelves stocked ahead of Donald Trump's tariff deadline, while China indicated renewed signs of slack.
Hong Kong stocks fell 1.2% after the release of weaker-than-expected Chinese economic data for July including retail sales and industrial production, while the large-cap CSI 300 gained 0.5% as traders speculated that the data may justify extra stimulus. Markets in India and South Korea are closed for public holidays.
The Nikkei 225 rebounded 1.2% after snapping a six-day winning streak on Thursday with its biggest one-day selloff since April 11, as Japanese GDP data showed the economy expanding by an annualised 1.0% in the April-June quarter, beating analyst estimates and providing more signals to the Bank of Japan, which next meets on September 19. The dollar weakened 0.3% against the yen to 147.64 .
