By Alex Financials

Cooling Inflation: PPI Comes in Below Expectations

The June Producer Price Index (PPI) was flat month‑over‑month, rising just 2.3% year-over-year—below forecasts.
Markets initially rallied on this inflation data, seeing it as a green light for the Federal Reserve to consider interest rate cuts later this year.
– Treasury yields slid in response .

Mixed Bank Earnings: Resilience on Display

Bank of America, Goldman Sachs, and Morgan Stanley reported strong Q2 earnings:

• Bank of America turned a profit but fell short on revenue and net interest income.

• Goldman Sachs exceeded estimates on both earnings and revenue (+36% trading revenue).

• Morgan Stanley beat expectations, driven by a 23% jump in equities trading revenue .

These strong results helped offset concerns in other sectors and supported a cautiously optimistic market tone .

Tech Sector: Semiconductor Slide, AI Strength

ASML (chip‑equipment leader) plunged over 10% after issuing a weak 2026 outlook despite strong Q2 earnings—slamming the semiconductor equipment group including KLA and Applied Materials .
Nvidia ($NVDA) and AMD down slightly; however Nvidia benefited from U.S. approval to sell its H2O chips to China .
AI‑related names like CoreWeave and Super Micro Computer showed modest gains.

Fed Chair Shake‑up Rumor Rocks Markets

A Bloomberg report suggested President Trump may soon remove Fed Chair Jerome Powell. This drove a notable reversal: major indexes fell (~0.3%) as investors weighed the risk of a shift in monetary policy direction.
– The Dow Jones dropped ~100 points and the S&P 500 slipped ~0.25%.

Tariff News & Crypto Cues

• President Trump announced legislation (“GENIUS Act”) to enable private stablecoin issuance—rocket‑fuel for Bitcoin, which rallied ~2% to nearly $119k.

• Ongoing tariff tensions remain critical: ASML cited these geopolitical uncertainties in its downgrade; U.S. wholesale inflation easing is partially attributed to a pause in tariffs.

Market Snapshot & Key Movers

• SPY & QQQ ETFs are flat to slightly down at mid‑afternoon trading.

• Apple ($AAPL) grew ~1% driven by broader tech sentiment .

• In pre‑market: Icahn Enterprises (+7%) and Unity Software (+6.3%) led gains; Blue Owl Tech sank ~3%.

• Johnson & Johnson climbed ~5.7% after beating Q2 forecasts and raising full‑year guidance.

• Brighthouse Financial jumped ~9% amid acquisition buzz; Ford dropped ~2.7% after announcing a $570M recall.

Outlook: Cautious Optimism

• Inflation relief and strong bank earnings lay a solid foundation for potential rate cuts.

• But the Fed uncertainty and chip/equipment softness introduce caution.

• Investors are advised to stay selective—tilting toward beaten-up financials, AI/tech plays, and inflation-sensitive names.

 Takeaway

The market is navigating a mix of good news (inflation, banks, crypto) and bad headlines (Fed chatter, semiconductor caution). The direction in the next few weeks will likely hinge on clarity around Fed leadership and whether inflation continues to moderate. Stay alert to earnings and economic data—but for now, resilience remains the key theme.