Nasdaq Soars as Stocks Rally on CPI Data Surprise – Bulls Charge Ahead

Markets roar back to life as inflation numbers spark risk-on frenzy.

Tech leads the charge

The Nasdaq composite jumps 2.3% as megacaps and growth stocks feast on cooler-than-expected CPI data. Traders ditch defensive plays faster than a DeFi rug pull.

CPI surprise fuels rally

With inflation coming in at 3.1% annualized – just below estimates – the Fed pause narrative gains steam. Wall Street's algo-traders pile in like it's 2021 all over again.

Bonus cynicism: Just wait until the 'transitory' crowd takes their victory laps – until next month's data print, anyway.

U.S. inflation data

Stocks were also buoyed by the release of key inflation data. According to the Bureau of Labor Statistics, the U.S. Consumer Price Index ROSE 0.3% month over month in June and 2.7% year over year. By comparison, consumer prices had increased 0.1% in May.

The data from the Bureau of Labor Statistics indicated consumer prices jumped above the 2.4% seen in May and the 2.6% economists had forecast. Meanwhile, Core prices climbed 0.2% in June, above 0.1% seen in May. However, core CPI in June was below the 0.1% recorded in May.

“Both stock and bond markets have reacted favorably to the June U.S. CPI data, which largely aligned with, or came in slightly softer than, consensus forecasts,” said Mohamed El-Erian, the president of Queens’ College, Cambridge.

He added via X:

“While these figures will undoubtedly intensify the Administration’s pressure on the Federal Reserve to reduce rates as early as this month, they are unlikely to sway most Fed officials given their stated criteria for resuming the rate-cutting cycle that, unlike that of the ECB and the Bank of England, has been put on pause so far this year.”

Elsewhere, big banks have begun reporting earnings results for quarter two, including JPMorgan (JPM), Citigroup (C) and Wells Fargo (WFC). For instance, JPMorgan’s Q2 results were better than expected. The investment banking giant’s revenue increased 8% to $2.5 billion quarter over quarter in Q2.    

Investors will also focus on earnings results of Goldman Sachs, Johnson & Johnson, United Airlines and Netflix, Morgan Stanley, Bank of America.