Overview
The July Consumer Price Index (CPI) rose 2.7% year-over-year, coming in below market expectations and providing relief to investors. However, warning signs of continued inflation pressure emerged, as the core CPI, excluding volatile food and energy prices, exceeded estimates with a 3.1% increase, marking the fastest rise since the beginning of the year. Despite this, the market focused on the headline CPI being lower than expected, bolstering hopes for a rate cut, which served as a strong catalyst for the stock market rally.
| Nasdaq Composite | S&P 500 |
| Dow Jones Industrial Average | 1 South Korean won equals |
Major News
President Trump criticized Fed Chairman Powell on social media following the CPI announcement, specifically regarding the remodeling expenses controversy, indicating a possible lawsuit to increase pressure. The debate continued with Treasury Secretary Mnuchin discussing the potential necessity of a 50 basis point rate cut in September. Meanwhile, Pence's advisor Wylie suggested the Fed might soon start normalizing policy amid a weakening labor market and stable inflation expectations.
Tomorrow's Economic Indicators
| Time | Event |
|---|---|
| 20:00 | U.S. MBA Mortgage Applications |
| 21:00 | Fed's Barkin Speech |
| 23:30 | U.S. EIA Crude Oil Inventories |
General Opinion
Overall, optimism about inflation outweighs concerns, leading to a bullish market. However, potential conflicts between Trump’s tariff policies and the Federal Reserve's strategies could impact the market. Attention is shifting to upcoming producer price index data and retail sales figures, which could further influence market direction.
