Inflation Just Cleared the Runway
For weeks the market was on edge waiting for the next inflation print, worried a hot number could reopen the sticky-inflation fear that has capped rallies before. That worry lifted today.
July PPI came in at 4.7%, below the 4.9% consensus and a full point under June’s 5.5%. It is the second straight cooling read, right behind a softer CPI. That is the number everyone is trading off right now.
It connects to two things next. First, the Fed: with inflation confirming the disinflation trend, the September FOMC meeting is now expected to hold rates steady, no surprises. Second, earnings: SMCI beat forecasts and jumped 7.7%, with CRWV and NBIS adding to the tape, proof the AI buildout is still funding itself. Cool inflation plus strong AI earnings is exactly why the S&P just printed a fresh record at 7,783.
One tension sits underneath the calm. Oil keeps carving lower waves, WTI at $81, Brent at $87, quietly doing part of the work on that PPI number, even as the index chases new highs on thinner justification each time. And the market showed on July 29th, when a leveraged AI name unwound in a flash, how fast calm turns violent when everyone is positioned the same way.
The number was good. What happens to the next one decides whether September is a formality or a fight.
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About the Author
Daniel Yue has been an active investor since 1980, with experience spanning stocks, currencies, futures, metals, and bonds. A scholar of the Chicago School of Economics, he holds a Certificate with Distinction from Cambridge University and a degree in International Trading from National Taiwan University. He served as Chief Analyst for over 30 years and Chief Mentor at Sincere Finance. In 2017, he received an award from the University of Arizona for financial internship leadership.
The analysis and opinions expressed in this article are for educational purposes only and do not constitute financial advice. Investing involves risk. Please consult a qualified financial advisor before making investment decisions.
About the Author
Daniel Yue has been an active investor since 1980, with experience spanning stocks, currencies, futures, metals, and bonds. A scholar of the Chicago School of Economics, he holds a Certificate with Distinction from Cambridge University and a degree in International Trading from National Taiwan University. He served as Chief Analyst for over 30 years and Chief Mentor at Sincere Finance. In 2017, he received an award from the University of Arizona for financial internship leadership.
The analysis and opinions expressed in this article are for educational purposes only and do not constitute financial advice. Investing involves risk. Please consult a qualified financial advisor before making investment decisions.