This content was published on
July 15, 2026 - 15:58
4 minutes
(Bloomberg) — Another report showing softer-than-anticipated inflation drove stocks and bonds higher as Wall Street further dialed back wagers on Federal Reserve interest-rate increases this year.The limited fallout from the Iran war on prices bolstered the view that the Fed will have more room to postpone any potential tightening move, with money markets now only fully pricing in a hike by December. Short-dated Treasuries outperformed the rest of the curve. The S&P 500 saw a second straight day of gains, with investors parsing the latest earnings reports.A decline in energy costs helped keep inflation pressures in check last month, with the core producer price index rising 4.7% from a year earlier, below the median estimate in a Bloomberg survey. Overall PPI inflation slowed in large part due to a 12% drop in gasoline prices.“It appears that the 2026 inflation resumption crested last month and headed back to its pre-conflict trend lower,” said Jamie Cox at Harris Financial Group. “This really helps the Fed avoid the mistake of hiking rates into a supply shock.”Still, oil climbed for a third day as the US launched more airstrikes on Iran, with President Donald Trump pledging to intensify the bombardment until Tehran stops attacking ships in the Strait of Hormuz and agrees to open the waterway.“There’s no near-term pressure on the Fed, but oil is in the driver’s seat over the longer term,” said David Russell at TradeStation. “Energy saved the day in June, but that might become ancient history if the Strait of Hormuz doesn’t open soon.”Inflation should continue moderating over the second half of the year, although the path is unlikely to be perfectly smooth, according to Charlie Anderson at UBS Wealth Management.“That gives the Fed flexibility to remain patient,” he said. “Markets may be pricing in a more hawkish outcome than ultimately materializes if inflation continues to trend in the right direction.”As for the renewed escalation in Middle East tensions, Max Kettner at HSBC says his view on risk assets is not affected by that.“Sudden escalations can unwind just as quickly,” he said. “We see the second-quarter reporting season as a much more important driver.”Corporate Highlights:Morgan Stanley’s stock traders sailed past Wall Street’s expectations to set another quarterly record, adding to the industry’s second-quarter windfall from buoyant markets and ongoing volatility. BlackRock Inc. pulled in $192 billion of net client cash in the second quarter, with investors pouring money into exchange-traded funds and pushing total assets above $15 trillion for the first time. Payment processing firm Stripe Inc. and private equity firm Advent International offered to buy fintech pioneer PayPal Holdings Inc. for more than $50 billion, according to people familiar with the matter. ASML Holding NV lifted its annual sales forecast for the second time this year and laid out plans to increase production as a surge in AI spending drives demand for its chip-making machines. Johnson & Johnson’s medical technology business struggled in the second quarter, clouding strong growth of drugs for inflammatory diseases and treatment-resistant depression that led to an overall sales and adjusted earnings beat. Some of the main moves in markets:StocksThe S&P 500 rose 0.3% as of 9:58 a.m. New York time The Nasdaq 100 was little changed The Dow Jones Industrial Average rose 0.4% The Stoxx Europe 600 rose 0.2% The MSCI World Index rose 0.4% CurrenciesThe Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1429 The British pound rose 0.4% to $1.3440 The Japanese yen was little changed at 162.22 per dollar CryptocurrenciesBitcoin rose 0.7% to $64,951.49 Ether rose 2.4% to $1,919.89 BondsThe yield on 10-year Treasuries declined three basis points to 4.56% Germany’s 10-year yield advanced one basis point to 3.12% Britain’s 10-year yield declined two basis points to 4.96% CommoditiesWest Texas Intermediate crude rose 0.6% to $79.85 a barrel Spot gold rose 0.2% to $4,060.73 an ounce ©2026 Bloomberg L.P.
