US Producer Prices Fall in June; AI Trade Unwinds in Equity Markets

U.S. producer prices (PPI) declined 0.3% month-over-month in June, driven by a 1.4% drop in goods prices, including a 6.4% fall in energy. Meanwhile, U.S. equities experienced a concentrated decline, particularly in the AI and semiconductor sectors, with the S&P 500 losing 1.6% and the Nasdaq Composite dropping 2.9% for the week ending July 17. This weakness was attributed to investor concerns over rising equipment costs and capital requirements for AI infrastructure, as well as new competition in AI models.