Wholesale prices flatten out in July and inflation eases. A Fed rate hike is in doubt.

The July wholesale price index came in as expected, with prices essentially flat, and this, combined with recent easing in inflation, may give the Federal Reserve pause as it considers its next move on interest rates. A rate hike in September, which had been considered a strong possibility just a week ago, now appears less certain.

This development has significant implications for the markets, as interest rate decisions can have far-reaching effects on the economy and, by extension, on the performance of large-cap stocks. If the Fed decides to hold off on a rate hike, it could provide a boost to equities, as lower borrowing costs can make stocks more attractive to investors. Conversely, if the Fed does proceed with a rate hike, it could lead to a market sell-off, particularly in interest-rate sensitive sectors.

Looking ahead, investors will be closely watching the Fed's Jackson Hole symposium later this month for any clues on the central bank's future policy intentions. Additionally, key economic data releases, including the upcoming personal consumption expenditures (PCE) price index and non-farm payroll report, will also be scrutinized for signs of inflation trends and the overall health of the labor market, which will help inform expectations around the Fed's next move.

Originally reported by marketwatch.com. LargecapNews adds analysis for finance & markets readers.