How Does PPI Affect Stocks & ETFs?

The Producer Price Index measures the average change in selling prices received by domestic producers for their output. It tracks inflation at the wholesale level — before it reaches consumers — making it a leading indicator of CPI trends.

PPI is an early warning signal for consumer inflation. Rising producer prices often get passed through to consumers, foreshadowing higher CPI. It also directly impacts corporate margins — companies that can't pass on costs see earnings compression.