Bryan R Smith
- US stocks dipped at the open after key inflation data showed prices rose more than expected in June.
- The Consumer Price Index increased 0.9% in June, far higher than Bloomberg's consensus estimate among economists of 0.5%.
- Goldman Sachs and JPMorgan kicked off a series of bank earnings this week. Both firms beat expectations.
- Sign up here for our daily newsletter, 10 Things Before the Opening Bell.
US stocks dipped at the open after key inflation data showed prices rose more than expected in June.
The Consumer Price Index increased 0.9% in June, far higher than Bloomberg's consensus estimate among economists of 0.5%. The reading marked the largest one-month change since June 2008.
On a year-over-year basis, prices increased 5.4%, higher than economists' expectations for a 4.9% year-over-year increase. However, June 2020 was the lowest point for Core CPI during the pandemic shutdown, so year-over-year increases are expected.
"A white-hot June CPI print has the markets jittery this morning. Stripping away food and energy, it was the highest print for Core CPI since November 1991 on a year-over-year basis, however moving forward we expect these inflation numbers to begin to cool," said Cliff Hodge, Cornerstone Wealth chief investment officer.
Here's where US indexes stood at the 9:30 a.m. ET open on Tuesday:
- S&P 500: 4,379.21, down 0.12%
- Dow Jones industrial average: 34,970.62, down 0.07% (25.56 points)
- Nasdaq composite: 14,726.58, down 0.03%
Bank earnings began this morning, with JPMorgan beating expectations as the banking giant benefited from record investment-banking fees and the release of cash set aside to cover loan losses.
Goldman Sachs also handily exceeded analysts' estimates. Investment banking generated its second highest quarterly net revenues ever, just behind the first quarter of 2021, thanks in large part to a robust IPO market. The strong numbers in that segment offset a slowdown in Goldman's trading business.
Although CPI came in higher than expected, a June Bank of America survey reveals most fund managers believe the global economy has reached "Peak Boom." Month on month, 2% fewer respondents to the bank's monthly global fund manager survey believe economic growth and inflation will rise above current predictions. Overall, 74% of fund managers still expect growth and inflation to be "above trend."
The yield on the US 10-year Treasury gained 1.5 basis points to 1.378%.
West Texas Intermediate crude rose 0.1%, to $74.18 per barrel. Brent crude, oil's international benchmark, increased 0.4%, to $75.43 barrel.
Gold was flat at $1,805.70 per ounce.