SPY Nears All-Time High as Inflation Cools—Wall Street Breathes Again

Soft inflation data sends SPY flirting with record highs—because nothing fuels rallies like the Fed taking its foot off the brakes.

The CPI Effect

Markets are pricing in rate cuts after the latest inflation print came in cooler than a crypto miner''s server room. Traders are now betting the Fed will pivot faster than a DeFi yield farmer chasing APYs.

Liquidity Party

Risk assets are rallying hard—SPY''s surge proves even institutional investors still dance when central banks turn on the money printer. Funny how ''transitory'' inflation always returns... just in time for election season.

The Cynical Take

Another ''goldilocks'' report, another speculative frenzy. Remember: on Wall Street, ''soft landing'' just means the rich get to keep their private jets idling longer.

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Core CPI, which excludes food and energy due to their volatility, ROSE by 0.1% MoM and 2.8% YoY. Both of these figures were below the economist estimates of 0.3% and 2.9%, respectively.

When will Tariffs Affect Inflation?

Many economists had believed that tariffs WOULD begin to lift prices in May. That wasn’t the case, although the effects could still materialize in the coming months.

“Tariff-driven price increases may not feed through to the CPI data for a few more months yet, so it is far too premature to assume that the price shock will not materialize,” said Principal Asset Management Chief Global Strategist Seema Shah.

Rate cut odds are changing with the new inflation data. There is now a 99.8% chance that the Fed holds rates steady at the June 18 meeting, up from 97.3% yesterday. At the September meeting, there is a 18.6% chance that the Fed cuts by 25 basis points, up from 14.4% yesterday. With lower inflation, the Fed has more reason to bring rates down.

Keep track of other key economic metrics with TipRanks’ Economic Indicators Dashboard.