The Dow Jones Industrials stayed green 29.14 points to 39,750.50.
The much-broader index fell 48.89 points to 5,585.02, threatening its seven-session win streak.
The NASDAQ dropped 326.87 points to 18,320.58, from Wednesday’s all-time high.
The consumer price index fell 0.1% last month from May, bringing the annual inflation rate down to 3%. Economists surveyed by Dow Jones had expected a 0.1% monthly increase and a 3.1% annual rate. Core CPI, which excludes food and energy, came in at a 3.3% annual rate, also lower than economists expected.
Odds of a September rate cut rose to greater than 80% based on fed funds futures trading following the CPI data. Traders still see the Fed standing pat at its meeting later this month.
Housing-related shares such as Home Depot and D.R. Horton jumped on the hope lower rates would reignite a stalling housing market. Industrial stocks like Caterpillar also gained.
Prices for the 10-year Treasury jumped, lowering yields to 4.17% from Wednesday’s 4.28%. Treasury prices and yields move in opposite directions.
Oil prices advanced 39 cents at $82.49 U.S. a barrel.
Gold prices spiked $41.50 to $2,421.20