Fresh U.S. inflation data suggests resurgent price pressures, compelling investors to recalibrate Federal Reserve rate cut expectations. The Consumer Price Index (CPI) climbed 0.3% monthly and 2.7% annually in June – the sharpest year-over-year increase since February – while NVIDIA’s stock surged over 4%, propelling its market valuation beyond $4.1 trillion.
Tariff-sensitive sectors displayed notable upticks: apparel prices rose 0.4% and household goods jumped 1.0% monthly, signaling early impacts of trade policies. Though housing costs edged up a modest 0.2%, they remained the primary inflation driver with a 3.8% annual gain. Conversely, auto prices softened with new vehicles down 0.3% and used vehicles sliding 0.7%. Core CPI, excluding volatile food and energy components, increased 0.2% monthly – marginally below forecasts – and 2.9% annually.
Nick Timiraos, widely regarded as the Fed’s informal mouthpiece, observed that June’s figures would likely reinforce caution among policymakers. Officials anticipating delayed tariff effects saw little reason to revise projections, while skeptics of inflation persistence found scant evidence to shift their stance. The data’s ambiguity elevates the significance of July and August releases for future monetary decisions.
Equities responded with divergence: the Dow dipped 0.1% while the S&P 500 and Nasdaq advanced 0.36% and 0.73% respectively. Current projections suggest the Fed will maintain rates this month before implementing a 25-basis-point cut in September, despite sustained pressure from former President Trump for immediate easing. Trump intensified his campaign against Chair Jerome Powell, with Treasury officials confirming a formal search for potential successors had commenced.
NVIDIA dominated market attention after CEO Jensen Huang announced U.S. approval for H20 AI chip exports to China. Based on Hopper architecture and CoWoS packaging, these specialized accelerators target inference and mid-scale training applications. Shipments had stalled since April due to licensing requirements over supercomputing concerns. Huang concurrently unveiled the RTX Pro series – a high-performance platform for digital twins, generative AI, and scientific visualization – amplifying the company’s professional computing ecosystem.
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