The market rally stalled a bit off the back of hotter-than-expected inflation data. But investors aren't panicking. Why it matters: Investors see the price pressures as proof that consumers can handle more — and that companies can cash in.

While consumer-level inflation, as measured by the Consumer Price Index and Personal Consumption Expenditures Index, has ticked only marginally higher, PPI inflation soared in Jul

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.

Wholesale inflation picked up more than expected last month, indicating that mounting pressure on input costs will likely translate into higher consumer prices before long.