The S&P 500 Index closed up 0.38% on Tuesday, with the Dow Jones Industrial Average rising 0.02% and the Nasdaq 100 increasing 1.10%. September E-mini S&P futures rose 0.35%, while September E-mini Nasdaq futures gained 1.05%. This uptick followed a better-than-expected US June Consumer Price Index (CPI) report, which showed inflation easing to 3.5% year-over-year, an improvement from 4.2% in May and below the anticipated 3.8%. The 10-year Treasury yield fell 4 basis points to 4.58%.
U.S. bank stocks rallied on the back of strong Q2 earnings from Goldman Sachs, JPMorgan Chase, Bank of America, and Wells Fargo, all of which exceeded expectations. Meanwhile, software stocks fell sharply, with IBM down 24% after its preliminary Q2 revenue missed consensus estimates. Internationally, South Korea’s Kospi Index rose 0.73% as semiconductor stocks rebounded, while China’s exports surged 27% year-over-year in June, outperforming expectations of 19%.
In geopolitical news, WTI crude oil rose over 1% to a one-month high after tensions escalated between the U.S. and Iran, amid the U.S. reimposing a naval blockade and airstrikes against Iranian positions. The chance of a 25 basis point rate hike at the upcoming Federal Reserve meeting on July 28-29 is currently estimated at 17%.
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