The Consumer Price Index fell 0.4% in June from the previous month, the largest one-month decrease since April 2020, while the year-over-year rate eased to 3.5% and core inflation was unchanged. The softer inflation reading caused futures traders to slash the probability of a Federal Reserve rate hike at the July meeting from 42% to 17%, sparking a relief rally in both stocks and bonds. The monthly decline was driven largely by a 9.5% drop in gasoline prices, which fell from $4.48 a gallon in late May to $3.81 in late June following a U.S.-Iran ceasefire that pushed Brent crude from $118 to around $72 a barrel. However, the ceasefire ruptured in early July, sending Brent crude back above $86 a barrel and reigniting market volatility, with the CBOE Volatility Index rising above 17 and the CNN Fear & Greed Index nearing the fear range. Analysts caution that elevated volatility could persist through November, as Iran may delay any real deal until after the U.S. midterm elections.
Apple Inc.Softer CPI reduces Fed rate hike fears, supporting stock market broadly.
NVIDIA CorporationEasing rate hike fears lifts high-valuation tech stocks.
Netflix IncLower rate hike probability boosts growth stocks like Netflix.