Hot PPI lifts Fed hike odds to 70%; stocks and crypto slide

A hotter-than-expected August PPI report — wholesale inflation at 5.4% year-over-year, with core PPI also running above forecast — pushed CME FedWatch-tracked odds of a rate hike at next week's FOMC meeting to 70%, up from roughly 62% before the data landed at 8:30am ET (12:30 UTC) on Thursday. US stocks and crypto both sold off in response, with bitcoin's sharpest drop of the day landing in the same hour as the print.

Markets

The Dow Jones Industrial Average fell 405.41 points (-0.8%) to close at 52,380.66. The S&P 500 slid 37.16 points (-0.5%) to 7,636.36. The Nasdaq Composite dropped 168.07 points (-0.6%) to 26,253.34. The small-cap Russell 2000 underperformed, down roughly 1.3%. Seven of the S&P 500's 11 sectors closed in the red, with rising Treasury yields on Middle East uncertainty compounding the inflation-driven selling.

European benchmarks fell broadly alongside Wall Street. The FTSE 100 closed down 0.7% at 14,357, the DAX was the session's weakest major continental index, and the CAC 40 held the smallest loss of the three. There was no distinct EMEA-specific catalyst beyond the same US PPI print and the ongoing US-Iran conflict weighing on sentiment globally.

Commodities

Brent crude held near $101.25/bbl, essentially flat on the day (+0.04%), still elevated near multi-month highs on the US-Iran conflict that has dominated the week's oil narrative; WTI traded around $96-97/bbl. Gold held steady near $4,405-4,406/oz, little changed from Wednesday's close — a pause after Wednesday's push above $4,400.

Crypto

Bitcoin fell to $77,242.01 as of 18:56 UTC, down 1.4% from the day's 00:00 UTC open of $78,306.43. The day's low of $76,676.07 printed between 12:00 and 13:00 UTC — the same hour as the PPI release — before a partial recovery. Ether was little changed, off about 0.1% to $2,466.02. Among the majors, XRP was the standout laggard, down 2.8% to $1.356; SOL fell 1.6% to $99.90; BNB fell 1.2% to $713.70; and DOGE fell 2.5% to $0.08402.

On the regulatory side, the Clarity Act market-structure legislation remains pending in Congress, with the CFTC chairman reiterating that the agency will propose its own digital-asset market-structure rules if the bill stalls in September.

What it means for crypto trading

With rate-hike odds for next week's FOMC now above 70% ahead of Friday's August CPI report, crypto remains directly hostage to the inflation data cycle. A hot CPI print would likely push hike odds higher still and could pressure bitcoin back toward Thursday's $76.7k intraday low; a soft print would open room for a relief bounce. The PPI-driven selloff underscores that, for now, crypto is trading as a rate-sensitive risk asset rather than decoupling from equities.

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