Another inflation reading came in cool. The producer-price index was flat in July after falling by 0.1% in June, below analysts' expectations for a 0.2% gain. This follows a slight slowdown in CPI reported Wednesday and added to expectations that the Federal Reserve can hold off on raising rates. The market-implied likelihood of a hike in September fell to around 35% from 55% a week ago.

Stocks hit new highs. The S&P 500 gained 0.65% to a new all-time high. The Nasdaq ended up 0.8% and the Dow rose 69.7 points. Tapestry fell sharply on slightly disappointing guidance. The owner of Coach and Kate Spade said revenue rose 9% in its fiscal fourth quarter but expects $8.4 billion to $8.5 billion in sales, with the midpoint below analysts' forecast. Tapestry stock fell 16.5%.

Workday stock surged on possible takeover. The business-software company jumped 18% after Reuters reported private equity firm Silver Lake is in talks to acquire it. Investors are also buying Treasury inflation-protected securities (TIPS) for long-term inflation protection, with the 30-year TIPS paying a real yield of around 3%.