Nasdaq Rallies, Russell Surges, Bonds Dive After July CPI Meets Expectations

Also 30-year T-Bond, Silver, Crude Oil, and Japanese Yen Futures

1. Nasdaq 100 E-mini futures (/NQ): +0.61%
2. 30-year T-Bond futures (/ZB): -0.46%
3. Silver futures (/SI): -0.26%
4. Crude Oil futures (/CL): -0.42%
5. Euro futures (/6E): +0.4%

The July U.S. CPI report didn't disappoint, with the month-over-month readings coming in right on the screws. The annualized run rate for headline inflation remains in the +2.4% to +3.6% range. But that's not the full story. Were it not for the tariff-induced inflation (vis-a-vis core goods) in recent months, U.S. inflation readings would be tilted lower thanks to weakness in the housing market. You could likewise make an argument that data center buildouts are behind the spike in electricity prices in recent months, which the Fed is probably looking through. With Fed cut odds for September approaching 100%, there is only one question remaining: will the data between now and the next Fed meeting point to recession or reflation? The bond market post-CPI is suggesting the latter.

Nasdaq futures (/NQU5) shot higher Tuesday, rising 0.5%, after this morning’s inflation data came in below estimates, which eased concerns that tariffs would raise prices and strain economic activity. Intel (INTC) rose nearly 2% after President Trump backed off on calling for the resignation of its chief executive, Lip-Bu Tan. Circle Internet Group (CRCL) rose over 7% after a positive earnings report. Eastman Kodak Company (KODK) fell over 20% after the company warned that it may not be able to stay in business. CoreWeave (CRWV) is scheduled to report Q2 earnings after the bell today.

Treasuries rose after this morning’s inflation report, but traders surrendered those gains shortly thereafter, with 30-year T-Bond futures (/ZBU5) falling about 0.5% through the first 30 minutes of the Wall Street trading session. Losses were more contained in the short end of the curve. Traders elsewhere in the market may be overestimating the confidence that rates can continue to fall after a September rate cut, given that there are still tariff impacts that are likely not seen yet.

Silver prices (/SIU5) saw a volatile post-inflation reaction, with prices swinging into gains and then losses in the hour after the report. Prices made a new intraday low about an hour into the Wall Street trading session before trimming some losses to trade about 0.2% lower. The move higher in yields weighed on the metal despite a muted dollar. For now, traders seem ready to take on some risk in equities following the inflation report, which is leaving gold and silver on the sidelines.

Crude oil prices (/CLU5) were lower Tuesday morning as traders prepare for a meeting between President Trump and President Vladimir Putin in Alaska on Friday. OPEC increased its global oil demand forecast for 2026, according to a report from the group released on Tuesday. The group also sees lower output from the United States in 2026, potentially leading to a tighter market if the economy performs at its projections. Inventory data from the American Petroleum Institute (API) is due out today.

Euro futures (/6EU5) found support at the 9- and 21-day exponential moving averages, pushing about 0.4% higher in early trading. Germany’s ZEW Economic Sentiment Index fell to 34.7 in August from July’s 52.7, suggesting that optimism in one of Europe’s largest economies is slipping. While the Euro has rallied since the start of the month, it remains below swing high levels seen in July. Prices will have to break above the 1.17 level to establish a more solid footing to target those recent highs.

Christopher Vecchio, CFA, tastylive’s head of futures and forex, has been trading for nearly 20 years. He has consulted with multinational firms on FX hedging and lectured at Duke Law School on FX derivatives. Vecchio searches for high-convexity opportunities at the crossroads of macroeconomics and global politics. He hosts Futures Power Hour Monday-Friday and Let Me Explain on Tuesdays, and co-hosts Overtime, Monday-Thursday. @cvecchiofx

Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater

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