Stock Market Live July 16: Surprisingly Mild Inflation Report Drives S&P 500 (VOO) Higher
Key Points
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US BLS data showed no increase in producer inflation rates in June, improving on yesterday’s news regarding consumer inflation.
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Earnings season has begun in earnest, and much of the news is good.
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Wednesday Wrap-up
The Vanguard S&P 500 ETF closed at 573.77 Wednesday, up 0.3%.
Powell On the Outs -- Or Is He?
Actually, check that. Belying today’s Bloomberg report, President Trump is currently speaking with reporters, and saying he only discussed firing Fed Chair Powell as a “concept” (whatever that means). Indeed, the President now says it’s “highly unlikely” he’ll switch Fed chairs after all!
The stock market isn’t quite sure what to make of the news. It’s still in the red… but only down less than 0.1% now.
So Long, Chairman Powell?
In perhaps the most-already-telegraphed move of the last six months, Bloomberg reports that President Trump will replace Federal Reserve Chair Jerome Powell with a new chairperson “soon,” and well ahead of his May 2026 expiry of term of office. The President is reportedly upset with the Fed’s refusal to lower interest rates, and wants a more compliant Chair.
Investors aren’t thrilled with news of the disruption in Fed leadership, and the Voo is now down 0.6%.
Oil Cools Off
Citigroup downgraded a pair of oil refinery stocks this morning, cutting both Valero (NYSE: VLO) and Phillips 66 (NYSE: PSX) to neutral. Both companies are S&P 500 component stocks, and both are trading lower this morning on the downgrades.
The Voo, however, is still up 0.2% in the market’s opening minutes.
This article will be updated throughout the day, so check back often for more daily updates.
One day after U.S. Bureau of Labor Statistics data showed that the consumer price index (i.e. consumer inflation) accelerated in June, but no more than anticipated, new BLS data on wholesale prices Wednesday showed “no change” in June — as in no acceleration in inflation. The producer price index was flat month over month, rather than increasing 0.2% as expected.
The implication: Trade turmoil from President Trump’s tariffs isn’t yet causing any particularly worrisome spike in inflation.
The second order implication: The Federal Reserve now has more of an excuse for lowering interest rates later this year, if it wants to take it.
The Vanguard S&P 500 ETF (NYSEMKT: VOO) seems happy to hear that, and is up 0.2% premarket.
Earnings
Earnings season is upon us and multiple big S&P 500 component companies are reporting their Q2 financial results:
J.B. Hunt (Nasdaq: JBHT) reported in-line $1.31 earnings and revenue slightly ahead of expectations, sending its shares modestly higher in pre-market trading.
Johnson & Johnson (NYSE: JNJ) reported $2.77 per share in Q2 profit, $0.09 better than expected, and revenues beat as well.
Bank of America (NYSE: BAC) furthered yesterday’s string of good banking news, reporting $0.89 per share in Q2 profit, $0.03 better than expected. Although revenue fell a bit short of consensus, the stock is up 0.8% premarket.
Morgan Stanley (NYSE: MS) then reported a $2.13 per share profit, $0.15 better than expected.
And Goldman Sachs (NYSE: GS) earned $10.91 per share in Q2 — $1.32 more than analysts had forecast.
Analyst Calls
S&P 500 relative newcomer Palantir (Nasdaq: PLTR) won an upgrade to neutral from Mizuho this morning. While not yet ready to tell investors to buy the defense stock, Mizuho admitted: “PLTR’s recent execution and momentum is stunning, including material upward revisions across its commercial and government segments that we very much underestimated.”
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