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July 14, 2026 - 15:56
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(Bloomberg) — A cooler-than-estimated inflation reading spurred gains in both stocks and bonds, easing concern about the potential for imminent Federal Reserve rate hikes amid a resurgence in oil prices.The S&P 500 extended this month’s advance, with a rally in chipmakers overshadowing losses in software shares after International Business Machines Corp.’s sales miss. Big banks kicked off the earnings season with solid results. Treasury 10-year yields fell five basis points to 4.57%. Money markets trimmed bets on a July Fed hike to 20%. US crude topped $80.Consumer prices dropped in June for the first time in six years and a key gauge of underlying inflation was little changed. Fed officials will likely welcome the data ahead of their upcoming meeting, though a new upturn in oil prices amid renewed hostilities in the Persian Gulf risks prolonging the fallout from the conflict.“The Fed was losing patience with high inflation readings, and today’s cooler-than-expected report gives them room to breathe,” said Ellen Zentner at Morgan Stanley Wealth Management. “By surprising on the downside, it relieves immediate pressure for action.”Fed Chairman Kevin Warsh said policymakers have no tolerance for high inflation, reiterating a vow to tame price growth that has been elevated for five years. He was due to appear before lawmakers at 10 a.m. Washington time.“The weaker inflation data likely keeps the Fed on hold for now and reduces any rate hike odds, but we remind investors that almost every communication that has emanated from Chair Warsh during his short tenure so far has been hawkish,” said Skyler Weinand at Regan Capital.Investors will likely feel more confident that inflation has peaked, easing concerns that the Fed will be forced to raise rates later this month. But this is not an all-or-none situation, according to Bret Kenwell at eToro. While inflation has cooled, it has not disappeared, he added.“The well-behaved CPI print likely lowers pressure on the Fed to hike soon, but the reignition of hostilities in Iran means the prospect of hikes is far from over,” said Kay Haigh at Goldman Sachs Asset Management.“Although a path remains for rates to stay unchanged this year, the re-escalation of the conflict has narrowed it,” he noted.The interim peace between the US and Iran effectively collapsed after American forces reimposed a naval blockade and launched another wave of airstrikes, while Tehran attacked more oil tankers sailing through the Strait of Hormuz. Traffic through the waterway has dwindled and oil has surged 20% since the attacks restarted.Corporate Highlights:JPMorgan Chase & Co. reported its highest quarterly profit ever as stock traders blew past analysts’ estimates and a long-held Visa Inc. stake paid off to the tune of $4.6 billion. Goldman Sachs Group Inc. trounced its own Wall Street stock-trading records, posting $7.42 billion for a quarter that saw indexes rip higher and ongoing market volatility around artificial intelligence and war in the Middle East. Bank of America Corp.’s stock traders notched a record during the second quarter, benefiting from market volatility, while its investment bankers capitalized on a dealmaking resurgence. Wells Fargo & Co. reported second-quarter earnings that beat Wall Street estimates on higher fees from wealth management and investment banking. A slew of Citigroup Inc.’s key business lines surpassed Wall Street’s expectations, although the bank’s record haul in stock trading fell short of the growth posted by rivals. Some of the main moves in markets:StocksThe S&P 500 rose 0.3% as of 9:56 a.m. New York time The Nasdaq 100 rose 0.9% The Dow Jones Industrial Average rose 0.2% The Stoxx Europe 600 rose 0.1% The MSCI World Index rose 0.4% CurrenciesThe Bloomberg Dollar Spot Index fell 0.5% The euro rose 0.6% to $1.1449 The British pound rose 0.5% to $1.3413 The Japanese yen rose 0.3% to 161.95 per dollar CryptocurrenciesBitcoin rose 2.6% to $63,749.8 Ether rose 5.8% to $1,868.31 BondsThe yield on 10-year Treasuries declined five basis points to 4.57% Germany’s 10-year yield advanced one basis point to 3.12% Britain’s 10-year yield was little changed at 4.98% CommoditiesWest Texas Intermediate crude rose 2.6% to $80.17 a barrel Spot gold rose 1.8% to $4,075.65 an ounce ©2026 Bloomberg L.P.
