Wall Street is edging back from its record heights after a disappointing report said inflation was worse last month.

Global stocks retreated from record highs on Thursday while U.S. Treasury yields rose after market expectations for an interest rate cut by the Federal Reserve were shaken by stronger-than-expected inflation data.

The surprise PPI reading, driven by the biggest monthly gain in core since 2022, further muddies the central bank's September decision to hold or cut rates in September.

The stock market’s rally stalled on Thursday after new data showed factory-gate inflation picking up, introducing fresh question marks over the outlook for interest rates. Major indexes finished mixed and near the flatline after investors bought the shares of big technology and financial companies and sold smaller stocks that had surged earlier in the week.