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.

The July Producer Price Index rose 0.9% M/M, miles ahead of the 0.2% increase expected and June's unrevised flat reading. That’s the biggest monthly rise in headline PPI in three years.

Here's what new data from the producer price index says about where inflation is headed, according to economists.

U.S. producer prices rose sharply in July, driven by broad increases in service and goods costs, signaling renewed inflationary pressures.

The producer price index (PPI) for final demand rose 0.9% month-over-month after a flat reading in June. Core PPI, which excludes food and energy prices, rose 0.9% month-over-month after a flat reading in June. In July, the PPI for finished goods rose 0.5% month-over-month, up from 0.4% in June.

The fresh government data this week showed an eye-popping 38% surge in the wholesale price of vegetables in July, the biggest price spike for any product category. A continued rise of that magnitude could noticeably hike vegetable prices at restaurants and grocery stores within a matter of months, some analysts told ABC News.

Live Updates Live Coverage Has Ended Thursday Wrap-up 4:20 pm The Vanguard S&P 500 ETF closed Thursday almost flat at 592.77, down just 0.01%. Ask Sherwin-Williams... Why Its Stock is Going Down 1:32 pm BofA Securities analyst Steve Byrne removed his sell rating and upgraded S&P 500 component company Sherwin-Williams (NYSE: SHW) to neutral this

The biggest increase in wholesale prices in three and a half years stunned Wall Street, but is tariff-related inflation really set to soar? The proof is far from ironclad.