(AP) -- Stocks are slightly lower on Wall Street in early trading Friday after the government reported a slight increase in wholesale prices last month, suggesting that the Federal Reserve's work on bringing inflation to heel isn't done.
The S&P 500 was down 0.1%, on pace for its second losing week in a row. The Dow Jones Industrial Average was up 57 points, or 0.1%, at 35,146, as of 10:04 a.m. Eastern time. The Nasdaq composite was 0.5% lower.
Big tech companies were among the biggest losers in the early going. Chipmaker Advanced Micro Devices fell 2%.
The Labor Department reported Friday that its producer price index, which measures inflation before it hits consumers, rose 0.8% last month from July 2022. The latest figure followed a 0.2% year-over-year increase in June, which had been the smallest annual rise since August 2020.
"Not surprisingly, today's report offers the hawkish wing of the Fed more ammunition to advocate for another rate hike before the Fed is convinced it's reached its terminal rate," said Quincy Krosby, chief global strategist for LPL Financial.
Bond yields rose, including the two-year Treasury yield, which jumped to 4.88% from 4.80% right before the report's release. The two-year Treasury yield closely tracks expectations for the Fed.
The wholesale prices data follows Thursday's release of the government's consumer price index, which showed U.S. consumers paid prices that were 3.2% higher in July than a year earlier. That's a touch milder than the 3.3% inflation rate economists expected to see and down sharply from last summer's peak above 9%. Underlying trends for inflation were also within expectations.
By all measures, inflation has cooled over the past year, though it remains above the Fed's 2% target level. The moderating pace of price increases, combined with a resilient job market, has raised hopes that the Fed may achieve a difficult "soft landing": Raising rates enough to slow borrowing and tame inflation without causing a painful recession.
Such hopes helped the S&P 500 rally a big 19.5% through the first seven months of the year, though critics say Wall Street too quickly formed a consensus that inflation is continuing to cool, the economy will avoid a recession and the Fed has already hiked rates for the final time this cycle.
The Fed has said it will make upcoming decisions on rates based on what data reports say, particularly those on inflation and the job market. Its main rate is already at its highest level in more than two decades.
The yield on the 10-year Treasury rose to 4.14% from 4.10% late Thursday. It helps set rates for mortgages and other important loans.
In stock markets abroad, indexes declined in Europe and mixed in Asia.