Washington: US stock markets ended mostly flat on Thursday, after a higher-than-expected inflation reading dampened investor sentiment. Meanwhile, global oil prices surged as markets remained cautious ahead of a high-stakes summit between US President Donald Trump and Russian President Vladimir Putin, where the Ukraine conflict is expected to dominate talks.

The latest US Producer Price Index (PPI) -- which tracks wholesale inflation -- rose by 0.9% in July, well above expectations. This came as a surprise, especially after earlier consumer inflation data showed milder trends.

“The large spike in the Producer Price Index shows inflation is coursing through the economy, even if it hasn't been felt by consumers yet,” said Chris Zaccarelli, Chief Investment Officer at Northlight Asset Management. He described the data as a “most unwelcome surprise” that could weaken the case for an anticipated rate cut from the US Federal Reserve.

While markets still expect the Fed to cut interest rates by 0.25 percentage points, analysts said the chances of a larger 0.5% cut now appear unlikely.

Despite opening lower, the major US indices recovered during the session:

Dow Jones Industrial Average: Down less than 0.1% at 44,911.26

S&P 500: Up less than 0.1% at 6,468.54

Nasdaq: Flat at 21,710.67

In Europe, stock markets performed better. The FTSE 100 in London rose 0.1%, bouncing back from early losses after UK GDP data showed the economy slowed less than expected in the second quarter, even as Trump’s trade tariffs took effect. The CAC 40 in Paris and DAX in Frankfurt both climbed 0.8%.

Oil prices surged by around 2%, driven by concerns over potential disruptions to Russian crude exports if the summit between Trump and Putin fails to produce progress.

“If the meeting doesn't go well, we may see stronger sanctions on Russian oil,” said Stephen Schork of the Schork Group. “That would make it more difficult for this oil to reach the market. The market is very nervous.”

Brent crude closed at $66.84, up 1.8%, while US benchmark WTI rose 2.1% to $63.96.

Among individual companies, Intel saw its stock surge 7.4% after a Bloomberg report claimed the Trump administration is considering a government investment in the chipmaker in return for a stake--marking a significant departure from traditional US policy that avoids direct intervention in private businesses.

Global markets snapshot:

Asia-Pacific:

Tokyo - Nikkei 225: Down 1.5% at 42,649.26

Hong Kong - Hang Seng: Down 0.5% at 25,489.59

Shanghai Composite: Down 0.5% at 3,666.44

Currency markets:

Euro/Dollar: Down to $1.1657 from $1.1705

Pound/Dollar: Down to $1.3535 from $1.3576

Dollar/Yen: Up to 147.76 yen from 147.38

Euro/Pound: Down to 86.05 pence from 86.21