Indices:- U.S. equity index futures are higher after a contained rally sparked by a softer-than-expected June inflation report, with the S&P 500 (+0.4% to 7,543), Nasdaq 100 (+1.1% to 29,586), Dow 30 (+0.02% to 52,508), and Russell 2000 (+0.4% to 2,964) all closing higher; Treasury yields fell back and more so on the shorter end as cooling inflation prompted investors to scale back expectations for near-term Fed tightening, and market pricing (CME’s FedWatch) highly in favor of a hold this month from likelihoods that weren’t far off a coin toss prior to the CPI release, though via slight majority anticipates a rate hike in SeptemberStocks:- Chipmakers rebounded from Monday’s selloff, with sizable gains for Nvidia (NASDAQ:NVDA) (+4.1%), Micron (NASDAQ:MU) (+4.9%), and Intel (NASDAQ:INTC) (+4.5%) and seen as beneficiaries from IBM’s (-25.2%) warning regarding consumer spending shift towards hardware (see below)- Nasty session for shares of IBM (-25.2%) after its preliminary earnings miss and warning of weaker client spending that’s shifted towards hardware spending, though comments from its CEO regarding cyber fears boosted cybersecurity stocks including Palo Alto (+6.8%) and CrowdStrike (+12.1%); HSBC downgraded IBM to reduce from hold with a reduction in its price target- Tesla (NASDAQ:TSLA) shares (+0.4%) failed to get much of a lift in what was a calm close for the discretionary sector, while SpaceX (-2.2%) was in retreat again reaching $136 despite Evercore initiating coverage with an outperform rating and a lofty price target- Apple (NASDAQ:AAPL) (-0.8%) shares slipped after KeyBanc downgraded the stock to underweight and reduced its price target as well, citing concerns consumers could curb spending as prices rise- Volatile session for shares of Lucid (-16.2%) down by roughly half at one point before partially recovering as it said in a statement that rumors of it exploring options including going private or filing for Chapter 11 were false- Big moves within the financial sector following earnings releases, with JPMorgan Chase (NYSE:JPM) (+2.5%), Bank of America (NYSE:BAC) (+1.9%) and Goldman Sachs (NYSE:GS) (+7.9%) rallying after beating quarterly expectations, while Citigroup (NYSE:C) (-5.3%) and Wells Fargo (NYSE:WFC) (-2.7%) declined even after topping estimates- HCA Healthcare (-7%) under pressure after cutting its full-year earnings guidance and lowering the top end of its 2026 revenue outlook- Meme stock movers: Krispy Kreme (-4%), AMC (+4.5%), BlackBerry (+2.7%), Avis (+2.5%)- Crypto stocks mostly tracked cryptocurrencies higher: Coinbase (+2.6%), MicroStrategy (+6%), Mara Holdings (-0.3%), Gemini Space Station (+2.1%), Bullish (+8.7%), Circle Internet Group (+0.4%)Commodities:- Gold rebounded to climb back above $4K (but still within its bear channel) after softer-than-expected U.S. inflation data prompted traders to scale back near-term Fed rate hike expectations and pressured the dollar, with silver at the top of its channel touching the $59s again with its outperformance taking the gold/silver ratio below 69- Oil prices (WTI) remain near $80 though moves above it thus far failing to stick, with President Trump dropping plans for a 20% transit fee on cargo through the strait while warning of further military action and potentially against power plants and bridges, and with the naval blockade of Iranian ports near the strait reinstated; API’s weekly energy inventory readings showed a small draw for oil (-0.6m barrels) and larger for gasoline (-1.7m), while a build for distillate (+2.3m)FX/Central Banks/Crypto:- Bitcoin rallied briefly breaching $65K as the crypto sphere cheered softer-than-expected US inflation that reduced yields, rate hike likelihoods and the greenback, helping take Ether closer to $1.9K and Ether/Bitcoin to levels unseen since early May as the altcoin outperformed; net flows on the ETF front near the middle- US Dollar Index weakened notably within the 100 handle after softer June CPI reduced expectations for an immediate Fed rate hike, with USD/JPY briefly breaking beneath 162 again this morning- Federal Reserve’s Warsh that the Fed will deliver price stability and has “no tolerance” for persistently elevated inflation, reaffirming a review of the Fed’s inflation framework while arguing AI-driven investment should support long-term productivity, Barr that AI could meaningfully boost productivity but benefits may be unevenly distributed across firms and workers, and Goolsbee that June CPI was surprisingly benign but one month of data is insufficient, with several more similar inflation readings needed before confidence improves- Bank of England’s Bailey that the impact of the conflict on UK pricing data remains limited- Japanese Finance Minister Katayama floated the idea of adding government bonds to a tax-free investment program, a strategy to aid yen-denominated assets and in turn the nation’s currency Capital.com Client Sentiment:- Indices: Gains in the Nasdaq 100 take long sentiment out of heavy buy territory (from 66% yesterday to 59% as of this morning), with small changes for the remaining U.S. equity indices; elsewhere moves further into extreme buy in the ASX 200 (86% from 85%) while long bias is trimmed in both the Hang Seng (82% from 84%) and more so the Nikkei 225 (68% from 73%) following the gains- Commodities: Falls out of extreme buy in gold (74% from 79% yesterday) as latest lift off the lows aids fresher longs, though remains in extreme buy territory in silver (87% from 88%) little changed; WTI sentiment falls a couple notches (to 68% from 71%) but still heavy long- FX: Dollar weakness helps EUR/USD climb and reduces majority buy sentiment there (from 62% to 59%) but the same reaction didn’t occur in GBP/USD (58% from 60%), while the latest pullback in USD/CAD shifted sentiment (from slight sell 52% to the middle) as shorts closed out ahead of today’s BoC policy announcementData:- U.S. June headline CPI falls 0.4% m/m far larger than -0.1% expectations, with the y/y reading dropping from 4.2% to 3.5%, with core also lighter than anticipated at 0% and 2.6% (from 2.9%), respectively; {ecl-537||NFIB’s {Business Optimism}} Index rises to 97.4 from 95.3 prior- Chinese GDP 4.3% y/y for Q2 a slight miss and at its weakest since 2022; retail sales emerge from contraction up 1% y/y in June, industrial production for the same month a stronger 5.3%, unemployment rate falls a notch to 5%, fixed asset investment (ytd) worsens to 5.7%, and home prices still suffering contractionToday:- U.S. PPI and Empire’s manufacturing index (4:30pm Dubai time), Fed Chairman Warsh testifies again (6 pm), a few other FOMC members speak, EIA’s weekly energy inventory estimates (6:30 pm), Fed’s Beige Book (10pm)o Earnings from Johnson & Johnson, Morgan Stanley, BlackRock, and others- EZ industrial production (1 pm)- Bank of Canada’s policy announcement (5:45 pm; hold on rates expected)