Your Capital Markets Snapshot: Markets Responded to a Mix of Data, Results, and Geopolitical Developments

Last week, markets responded to a mix of inflation data, earnings results, and geopolitical developments. The Consumer Price Index (CPI) rose 0.2% month-over-month, in line with expectations, while core CPI climbed to 3.1%, the highest since February, driven by rising service costs. However, the Producer Price Index (PPI) surprised to the upside, increasing 0.9%, raising concerns about future consumer price pressures. Despite this, equity markets remained resilient, with the S&P 500 and Nasdaq gaining around 1% and the Dow Jones 1.8% over the week. Small-cap and value stocks outperformed their large-cap and growth peers, possibly signaling a broadening of market leadership as expectations for a September Fed rate cut continue to increase. Earnings season continued to support bullish sentiment, especially in the tech sector, where mega-cap stocks drove much of the growth. Tariff developments also made headlines, with new levies on semiconductors. Overall, markets showed strength but remain sensitive to inflation trends and central bank signals.