Wall Street is in full rally mode after July’s inflation data eased fears that tariff-related cost pressures were widespread. The headline Consumer Price Index (CPI) came in below expectations, holding steady at 2.7% year-over-year and fueling speculation of upcoming interest rate cuts.
- JETS ETF is moving fast. Check the chart here.
However, the core CPI – which excludes energy and food – jumped from 2.9% to 3.1% annually, topping estimates of 3%.
Both the S&P 500 and the Nasdaq 100 indices broke past new record highs at 6,430 and 23,780 points, respectively. The Dow Jones gained nearly 500 points, or 1%, while small-cap stocks stole the show, with the Russell 2000 jumping 2.2%.
While gasoline continued to slump and provided a negative contribution to the headline reading, other consumer expenses, such as transportation, medical care services, and used cars, showed the highest monthly increase.
Airline fares, in particular, jumped 4% on a month-over-month basis, causing a rally in airline stocks. The U.S. Global JETS ETF (NYSE:JETS) soared 6%, with United Airlines Holdings Inc. (NASDAQ:UAL) and Delta Air Lines Inc. (NYSE:DAL) both up by 9%, making them the strongest performers in the S&P 500.
President Donald Trump renewed public pressure on Fed Chair Jerome Powell, announcing that he was considering a major lawsuit against Powell over the Fed building renovation expenses.
Trump also defended tariffs and reiterated that consumers are not the ones paying them. The president also named E.J. Antoni, an economist at the Heritage Foundation, as the new Commissioner of the Bureau of Labor Statistics, who is reportedly considering discontinuing the publication of monthly jobs reports and instead releasing data only quarterly.
Investors are now almost fully pricing in a 25-basis-point interest rate cut in September, followed by another one in December, which caused renewed weakness in the U.S. dollar.
Gold rebounded 0.2% above $3,350 per ounce, silver rose 0.5% to $37.95, while crude oil remained under pressure, down 1% to $63 a barrel. Bitcoin (CRYPTO: BTC) remained relatively unchanged, trading around $119,000.
Tuesday’s Performance In Major US Indices, ETFs
| Major Indices | Price | 1-day % |
| Russell 2000 | 2,264.34 | 2.2% |
| Dow Jones | 44,470.29 | 1.1% |
| Nasdaq 100 | 23,780.09 | 1.1 % |
| S&P 500 | 6,432.83 | 0.9% |
According to Benzinga Pro data:
- The Vanguard S&P 500 ETF (NYSE:VOO) rose 0.8% to $589.30.
- The SPDR Dow Jones Industrial Average (NYSE:DIA) gained 1.0% to $444.49.
- The tech-heavy Invesco QQQ Trust Series (NASDAQ:QQQ) rose 1% to $578.59.
- The iShares Russell 2000 ETF (NYSE:IWM) rallied 2.2% to $225.05.
- The Communication Services Select Sector SPDR Fund (NYSE:XLC) outperformed, up 1.9%; the Real Estate Select Sector SPDR Fund (NYSE:XLRE) lagged, down 0.6%.
Tuesday’s Stock Movers
- American Airlines Group Inc. (NASDAQ:AAL) and United Airlines Holdings Inc. (NASDAQ:UAL) jumped 11% and 10%, respectively, as the July inflation data revealed a price spike in airline fares.
- Nvidia Corp.‘s (NASDAQ:NVDA) stock remained flat despite a broader market rally, following reports that the Chinese government is discouraging its local companies from buying the company’s AI chips.
- Stocks moving on earnings reports included ON Holding AG (NYSE:ONON) up 7%, and Cardinal Health Inc. (NYSE:CAH) down 7%.
- Intel Corp. (NASDAQ:INTC) saw its stock rise 3.5% after a 3.2% gain the previous day, as CEO Lip-Bu Tan‘s meeting with President Trump appeared to ease recent tensions.
- Earnings are expected from Alico Inc. (NASDAQ:ALCO), Anterix Inc. (NASDAQ:ATEX), CAE Inc. (NYSE:CAE), Everus Construction Group Inc. (NYSE:ECG), H&R Block Inc. (NYSE:HRB), Intapp Inc. (NASDAQ:INTA), KinderCare Learning Companies Inc. (NYSE:KLC), Luminar Technologies Inc. (NASDAQ:LAZR), Lumentum Holdings Inc. (NASDAQ:LITE), and Mineralys Therapeutics Inc. (NASDAQ:MLYS) after the market closes.
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Image created using artificial intelligence via Midjourney.