Closing Recap

U.S. stocks finished mostly lower as strength in mega-cap technology propped up the Nasdaq but couldn’t prevent a broader market decline; Treasury yields and the dollar rose after June CPI data showed a modest uptick in inflation, while disappointing bank earnings weighed on financials. 

Key Takeaways 

• Mixed Market, Tech Outperforms: The Nasdaq edged into record territory, lifted by strong gains in key semiconductor stocks (NVDA, AMD), while the S&P 500 and Dow finished lower. 
• Narrow Leadership, Weak Breadth: The rally was very narrow, with decliners outpacing advancers by more than 3:1 on the NYSE, highlighting broad underlying weakness. 
• CPI Inflation Ticks Up: June CPI headline inflation rose to +2.7% YoY (from +2.4%), though core CPI came in slightly cooler than expected, creating a mixed picture for the Fed. 
• Bank Earnings Disappoint: The unofficial start to Q2 earnings season saw disappointing results from several large cap banks (STT, BLK, WFC), weighing on the financial sector. 
• Nvidia Resumption Boosts Chips: Semiconductor stocks surged on reports of Nvidia’s planned resumption of H20 AI chip sales to China as part of U.S. negotiations. 
• Yields & Dollar Rise: Treasury yields and the U.S. dollar climbed as the inflation data and Fed uncertainty pushed back rate cut expectations slightly. 
• Gold & Oil Slip: Gold prices fell on the stronger dollar and rising yields, while oil prices also edged lower. 
• Trade Headlines Continue: A new U.S./Indonesia trade deal was announced, but the EU finalized a list of potential countermeasures, keeping trade policy in focus. 

Market Overview 

U.S. equity markets experienced a day of significant divergence, with the tech-heavy Nasdaq pushing to another all-time high while the broader market sold off. The S&P 500 opened at a new record but failed to hold its gains, finishing modestly lower, and the Dow Jones Industrial Average also declined. The outperformance of the Nasdaq was almost entirely driven by renewed strength in the semiconductor space. Stocks like Nvidia (NVDA) hit new highs following overnight news that the planned resumption of its H20 AI chip sales to China was part of broader U.S. trade negotiations. 

Index	Up/Down	% Change	Last
DJ Industrials	-437.07	-0.0098	44022
S&P 500	-24.89	-0.004	6243
Nasdaq	37.47	0.0018	20677
Russell 2000	-44.68	-0.0199	2205

The market digested a mixed June Consumer Price Index (CPI) report this morning. While headline inflation ticked up to 2.7% year-over-year as expected, the core reading (excluding food and energy) was slightly cooler than forecast. This data did little to change the overall market narrative, which still anticipates potential Federal Reserve rate cuts later this year. However, the initial reaction saw Treasury yields and the U.S. dollar move higher, which likely contributed to the pressure on non-tech sectors. 

Adding to the negative sentiment was the disappointing start to the Q2 earnings season for large cap banks, with shares of State Street, BlackRock, and Wells Fargo all falling after their reports. On the trade front, President Trump announced a new deal with Indonesia, but this was countered by reports that the EU has finalized a second list of countermeasures against U.S. goods, keeping the trade environment complex and uncertain.

Economic Data

The key U.S. economic release yesterday was the June CPI report, which showed a modest uptick in headline inflation, while regional manufacturing data improved but remained in contraction. 

• Consumer Price Index (CPI) (June): Headline CPI M/M: +0.3% (In line with consensus, vs. +0.1% prior). 
• Headline CPI Y/Y: +2.7% (vs. +2.6% est., +2.4% prior). 
• Core CPI M/M (Ex-Food & Energy): +0.2% (Below +0.3% est., vs. +0.1% prior). 
• Core CPI Y/Y (Ex-Food & Energy): +2.9% (Below +3.0% est., vs. +2.8% prior). 
• NY Fed Empire State Manufacturing Index (July): Rose to +5.5 (vs. -9.0 consensus, -16.0 prior). New Orders jumped to +2.0. Prices Paid remained elevated at +56.0. 

Commodities, Currencies, and Treasuries 

Gold prices slipped, with August futures falling $22.40 (-0.67%) to settle at $3,336.70 per ounce. The decline was driven by a stronger U.S. dollar and a rise in Treasury yields, which dulls the appeal of non-yielding bullion, overshadowing any safe-haven bids from ongoing trade uncertainty. Crude oil prices also edged lower, with WTI settling down $0.46 (-0.69%) at $66.52/bbl. Prices eased as the 50-day deadline for Russia to end the Ukraine war (to avoid sanctions) was seen as potentially reducing immediate supply disruption risks. 

Asset	Up/Down	Unit / % Change	Last
WTI Crude	-0.46	USD/bbl	66.52
Brent	-0.5	USD/bbl	68.71
Gold	-22.4	USD/oz	3336.7
EUR/USD	-0.0071	USD	1.1595
USD/JPY	1.27	JPY	148.95
10-Year Note	0.064	%	0.04491

Treasury yields rose across the curve, with the 10-year yield climbing nearly 5 basis points to 4.475% and the 30-year yield hitting its highest level since late May. The move higher reflected the uptick in headline inflation and uncertainty about the Fed’s reaction function. The U.S. dollar index rose +0.55%, hitting a four-week high against the Japanese Yen and pushing the Euro back below $1.16. Bitcoin pulled back slightly from its recent record highs.

Looking Ahead 

The market will continue to digest the implications of the June CPI data and the disappointing start to bank earnings season. Investor focus remains on the narrow leadership in mega-cap technology versus the weakness seen in the broader market. Any further trade headlines, particularly regarding China or the EU, will be key catalysts. Upcoming economic data, including retail sales and industrial production, will provide further insights into the health of the U.S. economy.