S&P 500 at three-month high on rising bets of smaller rate hikes

US producer prices fall in July, underlying inflation slows; Disney tops Netflix on streaming subscribers, shares jump; US weekly jobless claims rise for second straight week

The S&P 500 was trading at its highest level in more than three months on Thursday, extending a rally from the previous session as fresh evidence of cooling inflation further cemented hopes of a smaller rise in interest rates.

The benchmark index rose after data showed U.S. producer prices unexpectedly fell in July, bolstering the chance of a 50-basis point hike by the Federal Reserve in September instead of 75 basis points.

Meanwhile, the number of Americans filing new claims for unemployment benefits rose for the second straight week, indicating further softening in the labor market despite tight conditions.

The indexes had sharply