Hello traders,
Some mornings in the market feel like a gentle breeze. Today is not one of them.
Yesterday’s Producer Price Index came in scorching hot, posting its sharpest monthly gain in three years. That number was more than triple what economists expected, yet the futures market hardly blinked.
As I’m writing this, Dow, S&P, and Nasdaq futures are all modestly higher in premarket trade.
This calm reaction tells me one thing – big money was already positioned for turbulence.
When inflation data comes in this heat and the tape does not collapse, it is usually because institutions have their hedges and rotations in place.
The Federal Reserve still looks set to cut rates in September, with odds sitting in the mid-80 percent range.
But the dream of a bold 50-basis-point cut has faded fast. Now the focus is on a steady path of smaller cuts, with September, October and December each seeing a quarter-point trim if the economy plays along.
CPI day had /ES moving sideways and the next move will set August’s tone. When a market loads this much energy, the break isn’t just a trade, it’s the story.
That is where today’s retail sales report becomes the real market mover.
Early signs show consumers spending almost six percent more than last year, partly to beat the impact of new tariffs.
If that print comes in strong, it could make the Fed hesitate on easing too aggressively.
A consumer that is still spending freely is not the recipe for emergency rate cuts.
On the commodities side, crude oil is feeling the weight of geopolitics.
Prices are holding just above sixty-three dollars a barrel ahead of the Trump–Putin summit in Alaska.
A breakthrough could calm supply fears. A breakdown in talks could bring tariff threats on oil buyers like China and India – and the market will react in real time.
While headlines chase noise, this is how I read the shift before it moves the tape, with clarity and patience.
In the corporate corner, Intel has become a political chess piece.
News that the administration is exploring a government stake to push forward its Ohio chip plant sent the stock up in after-hours trade.
For futures traders, this is a reminder that industrial policy can create sudden winners in unexpected places.
As I see it, the setup today is all about reaction speed.
Retail sales at 8:30 AM ET will either reinforce or undercut the case for a September cut.
Oil traders should stay nimble around any summit headlines.
Equity traders should note that as long as S&P 500 futures hold above 6,480, the bulls still have the ball.
In markets like this, the calm before the number is often just the pause before the storm.
See you in the next one.
Imre Gams
Editor, The Trading Room
