Afternoon Note
The Consumer Price Index (CPI) came in at 3.3%, a drop of .1% compared to last month and expectations, which were both 3.4%. The energy component came down notably at -2% from April.
Stock Market Reaction
Both the S&P 500 and Nasdaq Composite are up over 1% on the news, with the Dow Jones Industrial Average lagging with just a slight gain. Rate-sensitive small caps (RUT) are up the biggest on this news at over 2.5%, as they stand to benefit from low inflation and interest rate cuts.
Several Sectors are up sizably on the news with Technology (XLK), Real Estate (XLRE), and Consumer Discretionary (XLY) leading the pack. We see notable strength in solar names such as Enphase Energy, Inc. (ENPH) and lending names such as Upstart Holdings, Inc. (UPST).
Notably both Energy (XLE) and Consumer Staples (XLP) reacted negatively to the news.
Bond Market Reaction
The 10 Year Treasury Note Yield (TNX) fell on the release to 4.263%.
Although expectations are still for no rate cut during today’s FED meeting, the market is now expecting 2 rate cuts with a sharp increase in probability on today’s news.
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7/18/2025 1:14 PM | Consumer Tariff Worries Subside |
7/18/2025 9:45 AM | America is in Play |
7/17/2025 1:27 PM | Extreme Greed Resumes |
7/17/2025 10:15 AM | A Fundamental Move |
7/16/2025 1:39 PM | Market Gyrations |
7/16/2025 9:44 AM | THE MAG ONE (NVDA) |
7/15/2025 1:35 PM | Semis Rise & Banks Slide |
7/15/2025 10:13 AM | THE CURIOUS CASE |
7/14/2025 1:32 PM | Decisive Week |
7/14/2025 9:32 AM | GET READY! |
7/11/2025 1:45 PM | Facing Pressure |
7/11/2025 9:48 AM | CLEAR FOR TAKEOFF |
7/10/2025 1:53 PM | Small Caps Rally |
7/10/2025 9:56 AM | ENOUGH ZEN TO SHARE |
7/9/2025 1:32 PM | NVDA New Milestone |
7/9/2025 9:46 AM | PASSING THE BATON |
7/8/2025 1:33 PM | Seesaw Session |
7/8/2025 9:55 AM | MORE SUMMER BLAHS THAN FEAR OF MYANMAR'S TARIFF |
7/7/2025 1:27 PM | Trade Talks and Profit Taking |
7/7/2025 9:51 AM | LOVING MOOD |
7/3/2025 9:45 AM | NICE & STEADY AS SEMIS CONTINUE TO CHIP IN |
7/2/2025 1:44 PM | Materials' Strength Continues |
7/2/2025 9:38 AM | BARNBURNER |
7/1/2025 1:29 PM | Rotation |
7/1/2025 9:45 AM | FEAR OF MISSING OUT IS CREEPING IN |
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