Rising Consumer Prices Send Stocks Soaring

Headline US Consumer Prices (3.2% vs street 3.1%) and Core CPI (3.8% vs street 3.7%) came in hotter than expected, indicating that inflation pressures not only are not decreasing as fast as investors had hoped; they may be starting to increase again. This adds evidence to support the “higher for longer” theme that Fed speakers have been running with since the start of the year.

Stocks are rallying on this news. US index futures have quickly popped from trading flat to down 0.5% before the news to gains of 0.3%-0.6% afterward suggesting investors are seeing this as a sign of continued economic strength and a positive environment for corporate earnings. Meanwhile, treasury yields are starting to climb again this morning with the 10-year Treasury Note back up above 4.10%.

In earnings news Oracle is up 13.2% premarket after beating expectations on earnings ($1.41 vs $1.38) after AI demand helped to boost its cloud computing division. Guidance was in line with expectations.

Overseas today, the FTSE is up 1.0% and the Hang Seng jumped 3.0%, while the Nikkei and Dax have been holding steady. Currency and commodity action is mixed. Crude Oil is flat, Natural Gas is up 1.6%, Copper is up 0.1%, Gold is down 0.5% and Bitcoin is down 0.2%.

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