July 14, 2026

Stocks traded higher Tuesday as a decidedly cool June inflation print reset the rate-cut conversation. Headline CPI fell -0.4% MoM (vs. -0.1% expected) and moderated to 3.5% YoY, while core inflation printed flat at 0.0% MoM and decelerated to 2.6% YoY — both well below consensus. The disinflation impulse flowed straight into long-duration equities: the Nasdaq Composite gained +0.90% to 26,107 and Nasdaq futures ran +1.08%, with NVDA +4.06%, GOOGL +1.99% and AMD +2.57% doing the heavy lifting. The S&P 500 added +0.38% to 7,543, but the Dow was pinned near flat at +0.02% to 52,508 as IBM softness and BRK-B -1.16% offset the strength elsewhere.

The session's clearest signal was cyclical leadership. Financials topped the tape at +1.25% on the back of big-bank earnings, with JPM +2.50% and BAC +1.88% shrugging off a mixed profit backdrop, though V -0.48% and MA +0.06% were laggards within the group. Energy (+0.44%) and Materials (+0.42%) rounded out the winners as WTI crude jumped +2.16% to $79.83 — lifting refiners MPC +2.20% and VLO +1.91% — while FCX +3.30% and gold's +1.31% surge to $4,058 buoyed the miners. NEM tacked on +1.77%.

The funding for the risk-on rotation came out of the defensives. Consumer Staples slid -1.60% (PM -2.35%, PG -1.54%, KO -1.39%) and Healthcare dropped -1.41% (MRK -2.62%, LLY -2.48%, JNJ -1.52%), a classic bond-proxy unwind even as Treasuries firmed. Note the intraday correlation structure: NQ tracked ES tightly (+0.87 rolling, +0.89 session) and held positive correlation to both ZN (+0.59) and TLT (+0.70), confirming the day was driven by the rates narrative rather than an idiosyncratic tech story. Technology itself finished essentially flat at -0.08% as AAPL -0.77% and MSFT -1.55% masked the NVDA-led semis strength.

Despite the friendly CPI, prediction markets and options positioning show little conviction on near-term easing. Polymarket assigns 92% odds to no change at the July 29 FOMC and 81% to zero cuts for all of 2026, keeping any dovish repricing capped. SPY options remain cheap — ATM IV just 8.3%, IV Rank 14, with an implied move of only ±0.5% and positive dealer gamma (zero-gamma at 709) suppressing realized volatility. A modest 0.8% 25-delta put skew signals persistent, if muted, downside hedging.

Attention now turns to Wednesday's PPI (headline MoM F: 0.0% vs. 1.1% prior; core PPI YoY F: 5.2%), which will test whether today's disinflation read is corroborated on the wholesale side, followed by the EIA inventory report after Tuesday's API draw of just -0.056M. Thursday brings Retail Sales and jobless claims, and Fed Chair Warsh's ongoing testimony plus a heavy slate of Fed speakers (Barr, Goolsbee, Cook, Bowman) will be parsed for any shift in tone. With the S&P 500 pressing toward the 757 SPY call wall, dealers positioned to dampen upside momentum, the path higher likely requires PPI confirmation of the inflation cooldown.