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What Happened in Markets Today

Another inflation reading came in cool. The producer-price index, which measures wholesale prices, was flat in July after falling by 0.1% in June. Analysts surveyed by The Wall Street Journal were expecting a 0.2% gain. The reading follows a slight slowdown in CPI reported Wednesday and added to expectations that the Federal Reserve can hold off on raising rates for now. The market-implied likelihood of a hike at its September meeting is now around 35%, down from 55% a week ago according to CME FedWatch.

Stocks hit new highs. The S&P 500 gained 0.65% to a new all-time high. The Nasdaq ended up 0.8% and the Dow rose 69.7 points, or 0.1%.

Tapestry fell sharply on slightly disappointing guidance. The owner of Coach and Kate Spade said revenue rose 9% in its fiscal fourth quarter. But it also said it expects to generate $8.4 billion to $8.5 billion in sales during the new year, and the midpoint of that guidance fell below analysts' forecast of $8.47 billion. Tapestry stock fell 16.5% in response.

Workday stock surged on possible takeover. The business-software company, which has been beset with AI disruption fears, jumped 18% after Reuters reported that private equity firm Silver Lake is in talks to acquire it.

Markets at a Glance

One Big Story

Investors are getting paid what seems like a lot to buy inflation protection for decades ahead. But longer-term bonds also come with longer-term risks.

Treasury inflation-protected securities, or TIPS, are government-issued bonds that in the simplest terms pay a yield on top of the rate of inflation. In effect, they offer the protection that an investor's money can at least keep up with inflation, plus some extra.

Some investors might say, "You had me at inflation protection." What's more, the market isn't setting some enormous inflation hurdle. The yield on a 30-year nominal, or "regular," Treasury bond is over 5.2%. The 30-year TIPS is paying what is known as a real yield -- or the rate on top of inflation -- of around 3%.

What's Coming Up

   -- Investors will get readings on the U.S. consumer on Friday, with retail 
      sales data and the preliminary University of Michigan Consumer Sentiment 
      Index both on deck. 

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About Us

Markets P.M. catches you up on the day's most important markets moves, delivered after the closing bell. This email was written by Aaron Back, Editor of Heard on the Street, The Wall Street Journal's home for financial analysis and commentary. To send us your feedback, reply to this email. Got a tip for us? Here's how to submit.