Goldman Sachs economists in a note estimated that consumers could soon bear up to 67% of tariff costs, up from 22%, thus escalating broader inflation risk. Before the Aug. 14 PPI report, markets were nearly unanimous in pricing a September Fed interest rate cut of up to 0.50%.

With the job market faltering and consumer prices not surging as expected, investors increasingly believe the Federal Reserve is about to cut interest rates to boost the economy.

Global stocks edged lower on Thursday, with equities on Wall Street ending flat, while U.S. Treasury yields rose after market expectations for Federal Reserve interest rate cuts were shaken by surprisingly strong inflation data.