Stocks Rise as Inflation Data Outweighs Chip Rout: Markets Wrap
(Bloomberg) — Another report showing softer-than-anticipated inflation drove stocks and bonds higher as Wall Street traders further dialed back wagers on Federal Reserve interest-rate increases.
The limited fallout from the Iran war on prices bolstered the view that the Fed will have room to delay any potential tightening move. Money markets continued to fully price in a rate hike this year, but not before December. Short-dated Treasuries outperformed. The S&P 500 saw a second straight day of gains, though a gauge of chipmakers lost 2.1%.
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.
“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.”
An escalating conflict in the Persian Gulf has revived concerns over supplies from the energy-rich region. The US launched more airstrikes on Iran after President Donald Trump pledged 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.”
Meantime, Fed Chairman Kevin Warsh said Trump — who’s long called for slashing rates — hasn’t tried to interfere with the central bank, and wouldn’t succeed if he attempted such a thing.
“I will tell you what I’ve said to the president repeatedly, and said to the Treasury secretary: They chose an independent guy to do an independent job, and that’s exactly what I plan on doing,” Warsh said at a Senate Banking Committee hearing.
US economic activity increased at a slight to moderate pace in recent weeks as most regions experienced little to no change in employment levels, according to the Fed’s Beige Book survey of regional business contacts.
“Some contacts tied these cost increases to the conflict in the Middle East; others mentioned tariffs. Consumer prices continued to rise, and a few districts said contacts saw greater price sensitivity among their customers,” the Fed noted.
Corporate Highlights:
United Airlines Holdings Inc. expects resilient travel demand to drive up full-year profit, even in the face of soaring fuel costs that sapped its outlook for the current quarter. Anthropic PBC is seeking to meet with investors ahead of its potential mega-IPO, according to people familiar with the matter. JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said the risks raised by Anthropic’s Mythos AI model are a “real issue” that the US government is on top of now. Apple Inc. received long-awaited government approval to roll out Apple Intelligence in China, potentially giving it a boost in the world’s most-competitive smartphone market. 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. Larry Fink’s plan to combine BlackRock Inc.’s significant index fund business with higher-fee active and private markets investments is bearing fruit, with revenue jumping and the firm’s assets hitting a record $15.3 trillion. PayPal Holdings Inc. has been working with advisers to review strategic options, people familiar with the matter said, as Stripe Inc. and private equity firm Advent pursue a $50 billion-plus takeover of the fintech pioneer. What Bloomberg Strategists say…
“Concerns that China will add memory capacity are hammering semiconductor and other AI-momentum names Wednesday, while softer inflation data and an uneventful Warsh testimony are cushioning the rest of the market.”
—Michael Ball, Macro Strategist, Markets Live. For the full analysis, click here.
Some of the main moves in markets:
Stocks
The S&P 500 rose 0.4% as of 4 p.m. New York time The Nasdaq 100 fell 0.3% The Dow Jones Industrial Average rose 0.3% The MSCI World Index rose 0.4% Currencies
The Bloomberg Dollar Spot Index fell 0.3% The euro rose 0.4% to $1.1464 The British pound rose 1.1% to $1.3535 The Japanese yen was little changed at 162.22 per dollar Cryptocurrencies
Bitcoin rose 0.6% to $64,899.45 Ether rose 2.5% to $1,921.8 Bonds
The yield on 10-year Treasuries declined three basis points to 4.56% Germany’s 10-year yield was little changed at 3.12% Britain’s 10-year yield declined four basis points to 4.94% Commodities
West Texas Intermediate crude rose 1.3% to $80.34 a barrel Spot gold was little changed ©2026 Bloomberg L.P.
