The S&P 500 Index ($SPX) (SPY) is up +0.30%, the Dow Jones Industrial Average ($DOWI) (DIA) has gained +0.60%, and the Nasdaq 100 Index ($IUXX) (QQQ) rose +0.97% today. September E-mini S&P futures (ESU26) increased by +0.28%, while September E-mini Nasdaq futures (NQU26) climbed +0.92%.
Stock indexes advanced on Wednesday as bond yields declined following a stronger-than-expected U.S. June CPI report. The 10-year Treasury note yield fell to 4.58%, down 4 basis points. Federal Reserve Chair Jerome Powell’s upbeat remarks on economic resilience, solid growth, and a stable labor market further buoyed equities.
Semiconductor stocks recovered from Monday’s decline, with South Korea’s Kospi Index rising +0.73% as SK Hynix and Samsung Electronics rebounded. U.S. bank stocks also gained, led by positive Q2 earnings from Goldman Sachs, JPMorgan Chase, Bank of America, and Citigroup. Meanwhile, software stocks declined, with IBM dropping -23% after missing revenue forecasts.
The U.S. June CPI increased 3.5% year-over-year, below the 3.8% consensus, while the core CPI rose 2.6% y/y, under the expected 2.8% increase. Powell emphasized the Fed’s commitment to combating persistent inflation, describing the labor market as “broadly stable” and wage growth as “solid.”
Stronger-than-anticipated Chinese trade data added to optimism, with June exports surging 27.0% y/y (vs. 19.0% expected) and imports rising 36.0% y/y, the highest in five years.
WTI crude oil prices rose over 2% to a one-month high, extending Monday’s 9% surge, amid escalating tensions between the U.S. and Iran after the collapse of a peace agreement. Naval blockades and airstrikes were reported, while Iran targeted oil tankers in the Strait of Hormuz. President Trump reaffirmed U.S. commitment to keeping the strategic waterway open, proposing a 20% cargo fee for protection services, though implementation details remain unclear.
Earnings season momentum continues, with Q2 forecasts suggesting a 23% earnings growth in the S&P 500, driven primarily by AI-related investments. AI infrastructure stocks may account for nearly 60% of earnings per share gains, according to Bloomberg Intelligence.
The market priced in a 14% probability of a 25-basis-point rate hike at the July 28-29 FOMC meeting.
Overseas markets showed mixed performance. The Euro Stoxx 50 declined 0.19%, while China’s Shanghai Composite rebounded 1.36% from a 3.5-month low, and Japan’s Nikkei-225 rose 0.74% after erasing a one-month dip.
Interest Rates
September 10-year Treasury note futures (ZNU6) rose 10 ticks, with the 10-year yield dropping to 4.583% from a 1.75-month high of 4.634%. Treasuries gained on cooling inflation data and Powell’s hawkish stance against inflation. Initial losses were offset by crude oil’s volatility. European bonds saw rising yields, with the German 10-year bund at 3.118% and UK gilts at 4.988%, as markets priced a 15% chance of an ECB rate hike in July.
US Stock Movers
Semiconductor and AI infrastructure stocks rebounded, with the iShares Semiconductor ETF (SOXX) up over 3%. Notable gains included SanDisk (+7%), AMD, Lam Research, and Western Digital (+5%), while Microchip Technology, KLA, and Intel advanced over 4%. Cybersecurity stocks rose, led by CrowdStrike (+7%), Palo Alto Networks (+5%), and Zscaler (+4%). Mining stocks surged on strong precious metals prices, with Southern Copper (+5%) and Freeport McMoran (+4%) among leaders. Software stocks fell, with IBM’s -23% drop dragging shares like Salesforce, Adobe, and Microsoft into decline.
Goldman Sachs led Dow gainers, rising over 6% after reporting a robust Q2 earnings beat. O-I Glass fell 8% following a Bank of America downgrade, while CoStar Group dropped 5% on a CFO transition announcement.
Earnings Reports
Bank of America (BAC), Citigroup (C), Goldman Sachs (GS), JPMorgan Chase (JPM), and Wells Fargo (WFC) are among firms reporting Q2 results this week.
