Wall St Rises on Cool PPI, Bank Earnings Beats
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- Wall Street's three major indexes closed higher — Dow +0.34% to 52,685.92, S&P 500 +0.36% to 7,570.72, Nasdaq +0.60% to 26,264.63 — with communication services leading and energy stocks posting the steepest decline.
- June's Producer Price Index posted an unexpected monthly drop, the second consecutive day of cooler-than-expected inflation prints after Tuesday's 3.5% CPI reading.
- PayPal surged 16% after sources told Reuters that Stripe and Advent International jointly offered to acquire it for $60.50 per share, roughly a 28% premium to its Tuesday close.
- BlackRock jumped 6.3% after beating Q2 profit expectations and Morgan Stanley edged up 0.5% after also topping estimates, with one CIO calling it 'the best bank setup in my 23-year career' as capital markets 'fire on all cylinders.'
- Fed rate-hike odds for this month's meeting fell to 10.2% from 31.0% a week ago (CME FedWatch), as newly confirmed Chair Kevin Warsh continued his second day of Senate Banking Committee testimony and Governor Lisa Cook said she is 'prepared to act' if inflation doesn't slow.
- Analysts expect S&P 500 Q2 earnings growth of 23.7% year-on-year, per LSEG, with the article noting that June's inflation data predates the renewed US-Iran airstrikes over the Strait of Hormuz and may not reflect coming price pressures.
Why it matters: Two consecutive soft inflation prints have collapsed July Fed hike odds to 10.2% from 31.0% a week ago, but the article flags that the June data captured a moment of fading US-Iran peace optimism — meaning July and August prints remain exposed to renewed Strait of Hormuz price pressures. Meanwhile, record capital-markets revenue is lifting bank and asset-manager earnings.
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