r/stocks
Inflation passed the exam but not the war... When the market'lll start ignoring the war again?
Inflation data was fine, but geopolitical tensions in the Middle East and surging oil prices overshadowed it, dragging down tech and semis.
- US CPI came in as expected, removing the risk of an imminent rate hike.
- Energy stocks are benefiting from the surge in oil prices due to Middle East tensions.
- Geopolitical risks in the Middle East and surging oil prices are overshadowing positive inflation data.
- Tech, semis, and AI-related names are experiencing continued sell-offs.
- The upcoming SpaceX IPO may pull capital away from other markets.
For now, it feels like inflation passed the test, but geopolitics became the main risk again. The big story today is that inflation wasn’t the problem.... the Middle East was.
US CPI came in pretty much as expected. Inflation is still well above the Fed’s 2% target, but the report wasn’t hot enough to trigger fears of another rate hike. For a few hours, that gave markets some relief.
Then Trump followed through on his threats and launched another round of strikes against Iran.
That immediately shifted the focus back to geopolitics. Oil jumped again, with Brent moving back toward $95, and investors started worrying about supply disruptions through the Strait of Hormuz. The market’s reaction says it all: good inflation data got overshadowed by fears of a wider conflict.
US stocks had another rough session, especially tech and semis. AI-related names continued to sell off, while energy stocks benefited from the surge in oil prices. The upcoming SpaceX IPO is also attracting massive investor demand, which may be pulling capital away from other markets.
The next key event is next week’s Fed meeting. The CPI probably removes the risk of an imminent rate hike, but the combination of higher oil prices and ongoing military escalation makes the outlook much more complicated.
\#stocks, #CPI #trades
sir, please just pull up to the 2nd window.
I couldn't get past the word in the headline...da fuck words people make up nowadays.
Why are you hash tagging on Reddit? Also, you have mixed two or three different metaphors in your title, and that’s disregarding that there is an actual war happening
“Inflation looked great I loved the 4%”
If you expect terrible things it’s apparently a good thing
Give it a few days until Fed starts managing expectations for rate hikes.
If he loved the 4% just wait until he sees the ppi
“The high inflation came in as expected. Ignore the collapsing of the U.S.-led world order and pay me!”
What? lol
PPI comes out today
Yeah because a war will cause continued oil shocks which will cause inflation......
If you like the inflation at 4.2, you will love it at 8!
I’m more worried about Japan rate will close billions of carry trade longs and will crash market .
Markets usually stop caring about geopolitical risk when the risk becomes measurable. Right now the problem is not just the war headline, it is that nobody can price the second-order effects cleanly: oil routes, retaliation risk, shipping costs, inflation expectations, then the Fed path. CPI can calm one variable, but energy shocks can reopen the same inflation trade pretty fast.
Not to mention, why price in the end of the world if no one will be around to collect
“Passed the exam…”???
Dude, the war has been going on for 3.5 months, and oil is not the only commodity getting choked! Oil supply shock causing inflation is only part of the inflationary story.
The bigger inflation risk is with Agri-commodity prices, with inflation from this segment looming next year due to fertiliser supply shock arising from the Middle-east war (note: because of fertiliser inventories and planting cycles, the world will not feel the impact of agri-commodities price hikes this year, but starting sometime next year).
Expect rate hikes next year (if not end of this year) as bitter medicine for the inflationary environment … there’s no choice. Otherwise, things will be worse when the inflation monster gets out of hand.
Warsh is gonna have a hard time explaining to his boss why the Fed is not cutting interest rates.
And stock investors who have been betting on rate cuts to juice up the market better come up with another theme.
Trump is going to claim he wanted rates increased. And honestly, he probably does.
He wants to flush people out of their sub-3% properties so his buddies can slurp them up in cash.
Just more wealth xfer...we are never going to see the legislation stopping corporate from buying SFHs that he hand-waved pushing.
If you look at the headline CPI data, energy was the main driver. The longer the strait remains closed or with limited throughput, the longer energy drives inflation. Hence the headline focus on the conflict.
Take a look at the PPI numbers that just came out, YoY hit 6.5%. Although we most likely aren’t getting a rate rise next week, it’s not off the table at all for the following meeting. ECB just raised today.
Shut up