July CPI came in at 3.4% on the year — exactly where the market expected. Core inflation held at 2.5%. No hot surprise. No cold surprise. The feared print that would have restarted the September hike conversation didn't arrive. The S&P rose 0.26% to 7,749. The Nasdaq gained 0.54% to 26,588. The Dow was flat at 53,770. Technology led all sectors at 1.6%, powered by an AI infrastructure rally that lit up the tape: CoreWeave surged 19% after its revenue doubled from a year ago. Super Micro jumped 19% on a strong forecast. Nebius — the Dutch neocloud — soared 34%. Dell gained 10%. Micron added 5%. The two days of selling before CPI were the market paying for insurance against a number that never came. Today the sellers bought back. The hike stays in December. The AI buildout is still accelerating. And the market is exactly where it was before it started worrying.
Relief rally, tech-led. The S&P rose 0.26% to close at 7,748.50 — touching a record intraday in the morning before fading into the close. The Nasdaq climbed 0.54% to 26,588.49. The Dow was essentially flat at 53,770.27. Technology was the dominant sector, up 1.6%, as AI infrastructure names rallied hard on the CPI-plus-earnings combination. Seven sectors closed green. Four closed red, led by consumer discretionary at minus 1% and communication services at minus 0.6%.
| The Numbers I Circled | At the close, August 12 · Day change |
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| July CPI | 3.4% annual | in line |
| Core CPI | 2.5% annual | in line |
| CoreWeave | rev doubled | +19% |
| S&P 500 Sectors | Day change |
|
| Info. Technology | | +1.6% |
| Industrials | | +0.8% |
| Utilities | | +0.6% |
| Real Estate | | +0.4% |
| Materials | | +0.2% |
| Financials | | +0.2% |
| Energy | | +0.1% |
| Consumer Staples | | −0.1% |
| Health Care | | −0.5% |
| Comm. Services | | −0.6% |
| Consumer Disc. | | −1.0% |
| | Notable Gainers | Day change |
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The CPI data was straightforward. Headline prices rose 0.1% for the month, following a 0.4% decline in June. On an annual basis, CPI came in at 3.4% — down from 3.5% in June and exactly matching the Dow Jones consensus. Core CPI, which strips out food and energy, rose 0.2% for the month and 2.5% on the year — also in line. LPL Financial's Jeffrey Roach said inflation remains too high but "the trend is moving in the right direction." The three Fed dissenters who voted to hike on July 29 don't get ammunition from this report.
CoreWeave was the session's standout. The Nvidia-backed cloud infrastructure company reported second-quarter revenue that doubled from a year ago, with an adjusted operating margin of 5% that beat expectations. The stock surged 19%. Super Micro Computer matched it with a 19% gain after issuing an upbeat profit and sales forecast for the current quarter. Nebius — the Dutch-listed AI cloud provider — soared 34%. Dell Technologies gained nearly 10%. Micron added about 5%. Cisco rose close to 3%. The AI infrastructure trade that sold off Monday and Tuesday reversed hard on Wednesday as the CPI came in tame and the earnings came in strong.
Oil remained a point of uncertainty. U.S. crude pushed above $83 while Brent dipped below $90, as prospects for reopening the Strait of Hormuz dimmed. Intel's common stock offering was upsized from $15 billion to $20 billion.
What The Market Is Pricing In
When the actual number matches the consensus exactly — CPI at 3.4% versus 3.4% expected — the market doesn't move much on the data itself. The price already reflected that expectation before the number hit the wire. On Wall Street they call this "priced in." The CPI was priced in before 8:30 a.m. What wasn't priced in was the risk that the number would be higher. The two days of selling before Wednesday — the S&P falling 0.32% on Tuesday and 0.06% on Monday — was the market paying the insurance premium against a hot print. When the print came in exactly as expected, the insurance was unnecessary. The sellers bought back. The market recovered. The round trip cost two days of time but almost nothing in price.
The rally today wasn't really about CPI. It was about CoreWeave and Super Micro proving the AI infrastructure cycle is still accelerating. Revenue doubling at CoreWeave. A raised forecast at Super Micro. Nebius surging 34%. Dell up 10%. These aren't stocks reacting to inflation data. They're stocks reacting to demand for GPU compute, data center capacity, and cloud infrastructure that's growing faster than anyone expected six months ago. The CPI gave the market permission to buy. The earnings gave it a reason.
CPI came in at 3.4% and the market barely moved on the data, but tech surged 1.6% on CoreWeave and Super Micro earnings — and the market is telling you inflation isn't the story anymore, AI infrastructure is the story, because the price of compute is driving more S&P revenue growth than the price of gasoline is driving inflation risk, and the companies building the AI buildout just proved the demand curve is still steepening. The September hike is off the table. The December timeline holds. FedWatch still shows a split market on whether the Fed moves at all this year. And the AI infrastructure names — the CoreWeaves, Super Micros, Dells, and Ciscos — just delivered a quarter that says the spending is not only continuing but accelerating. The multiplier effect that powered Caterpillar's record quarter two weeks ago now has the cloud layer confirming it.
In June 2023, CPI came in at 3.0% versus 3.1% expected — a slight positive surprise. The S&P rallied 0.7%. The market had de-risked, got a slightly better number, and rallied. Today the number was in line, not better — so the rally was smaller at 0.26%. The pattern is the same: de-risk ahead, get the number, reverse the de-risking. The size of the reversal depends on how far from consensus the number lands. A miss produces a surge. In-line produces a drift. A beat produces a selloff. Today was the drift.
Three things I'm watching tomorrow and into next week:
01 — Applied Materials earnings Thursday August 13
The last major semiconductor equipment name to report this season. Applied Materials builds the machines that build the chips that power the data centers. If AMAT beats on revenue and guides higher — confirming that TSMC, Samsung, and Intel are still ordering equipment at record levels — the AI hardware cycle is intact through year-end. If it misses or warns, the equipment cycle peaked in Q2 and the infrastructure rally that CoreWeave just confirmed runs into a supply-chain ceiling.
02 — Cisco earnings Thursday August 13
The enterprise networking bellwether. Cisco tells you whether corporate IT spending is holding up — routers, switches, and security infrastructure that connects the data centers CoreWeave and Super Micro are building. A beat confirms the AI buildout extends beyond GPUs into the networking layer. A miss says the spending is concentrated at the top of the stack and hasn't reached the plumbing yet. Cisco's guidance for the back half of 2026 matters more than the quarter itself.
03 — Oil above $83 — does the Hormuz stalemate push it to $90?
CPI came in tame because the June oil collapse ($95 to $76) dominated the first half of July's measurement window. August's measurement window captures oil at $80 to $85 with the Strait still closed and Iran demanding reparations. If oil pushes to $90 this month on the stalemate, August CPI will be hotter than July's, and the inflation-peaked narrative breaks. The Strait deal is the single variable that determines whether CPI keeps falling or reverses.
CPI came in at 3.4%. The market already knew. CoreWeave doubled its revenue. Super Micro raised its forecast. The AI infrastructure trade rallied 19% to 34% in a single session. The inflation story gave the market a pass. The earnings story gave it a direction. Tomorrow Applied Materials tells you whether the machines that build the chips are still running at full speed.
That's it for today. See you tomorrow after the close.
— Tom Hartley
Today In Perspective · Published daily, Monday–Friday, after the close
This newsletter is for informational purposes only and does not constitute investment advice. The author is not a registered investment advisor. Past performance does not guarantee future results. Consult a qualified financial professional before making investment decisions.
