Nvidia Lifts Stocks as Yields Fall on In-Line CPI
Published as of: July 15, 2025, 9:12 a.m. ET
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| The markets | Last price | Change | % change |
|---|---|---|---|
| S&P 500® index | 6,268.56 | +8.81 | +0.14% |
| Dow Jones Industrial Average® | 44,459.65 | +88.14 | +0.20% |
| Nasdaq Composite® | 20,640.33 | +54.80 | +0.27% |
| 10-year Treasury yield | 4.40% | -0.03 | -- |
| U.S. Dollar Index | 98.13 | +0.04 | +0.04% |
| Cboe Volatility Index® | 16.65 | -0.55 | -3.26% |
| WTI Crude Oil | $67.10 | +$0.12 | +0.18% |
| Bitcoin | $117,330 | -$2,905 | -2.42% |
Disclosure
Major index values are as of Monday's close; others are as of 8:53 a.m. ET.
(Tuesday market open) Pleasant tidings from Nvidia (NVDA) interrupted a day that was supposed to be dominated by big banks and inflation. Shares of the AI giant spiked 4.5% on news it would once again be able to sell its H20 chip in China, injecting early vigor across major indexes even though bank stocks wobbled despite a strong quarter from JPMorgan Chase (JPM).
On any other day, June's Consumer Price Index (CPI) would hog the headlines. The readings of 0.3% month-over-month growth for headline and 0.2% for core CPI (which excludes food and energy) compared with the Briefing.com estimates of 0.2% CPI and 0.3% core CPI. Treasury yields fell after the report, encouraged by the lower-than-expected core growth, even though headline and core CPI growth was stronger than the May readings of 0.1% for each. "Core came in cooler than expected for the fifth straight month," said Alex Coffey, senior trading and derivatives strategist at Schwab. "It basically solidifies that July will probably be a stand pat Fed meeting, but sets the stage for September to kick off rate cuts, assuming inflation continues on this trajectory."
On Monday, market action was subdued, with volume light despite all the data, earnings, and trade news swirling. The calm trading with slight gains—including a new record high for the tech-packed Nasdaq Composite—could reflect market confidence that something will be done between now and the August 1 tariff deadline to lower threatened levies, or simply market fatigue with the issue. The Nvidia news today, while not directly related to tariffs, could lift spirits on the trade front.
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Three things to watch
- CPI deeper dive: On an annual basis, CPI and core CPI growth were 2.7% and 2.9%, respectively, giving a bit of a mixed picture versus estimates of 2.6% and 3%. Both were up from May when they were 2.4% and 2.8%. There was some relief in the market early Tuesday that tariffs didn't appear to affect core prices, and the data showed air fares falling while car insurance costs rose at their lightest level in three years. Shelter prices rose 3.8% in June, one of the biggest reasons CPI continues to be sticky, but the 3.8% rise in that category was down from 3.9% in May. Auto prices continued to drop, falling 0.7% for used cars. Medical care services prices rose 0.6%. "While core annual CPI did tick up to 2.9% from 2.8% in May, the 0.2% monthly core growth is still in line with the Fed's target," Coffey said. Four Federal Reserve speakers are scheduled today, perhaps providing some early color commentary on the CPI data.
- Crypto faces major milestone with cryptocurrency law: It's being called "Crypto Week" in Congress with legislators on the verge of passing the country's first-ever cryptocurrency law. The House will consider a bill this week to regulate stablecoins—a type of cryptocurrency pegged to the dollar. The bill already passed the Senate, so House passage will mean it goes to the president for signing. The House will also consider a second, more complex bill to create a broad regulatory framework for cryptocurrencies generally. "It would clarify who is in charge of overseeing the crypto space…and set up some guardrails for the industry," said Michael Townsend, managing director, legislative and regulatory affairs at Schwab.
- Earnings season early prognostication shows estimates lower than Q1: Analysts expect 4.8% second quarter S&P 500 earnings per share growth, down from above 13% in the first quarter. Revenue growth is seen at 4.2%. This comes as the S&P 500 trades at a price-to-earnings (P/E) ratio of 22.3, historically high and well above the 10-year average near 18. Most of the projected earnings gains in the second quarter are courtesy of info tech and communication services sector stocks, with five sectors expected to see earnings fall from last year. If early earnings disappoint and the market continues to trade at what's now a historically high P/E, it could call pricing into question, especially if analysts' estimates for third and fourth quarter earnings don't climb. Estimates for second quarter earnings are markedly lower than in the first quarter, setting the bar very low for Wall Street. Investors should consider paying close attention to guidance and whether tariffs play a big part in comments from executives.
On the move
- JPMorgan Chase shares were flat ahead of the open despite earnings that beat analysts' estimates for a sixth straight quarter, lifted by a 15% rise in markets revenue, a 5% rise in average loans and 6% in deposits, and adjusted earnings of $4.96 per share, well above the consensus of $4.48. The company also cited rising momentum in its investment banking business as market sentiment improved. CEO Jamie Dimon said in the press release that the economy remains "resilient" but faces significant risks, "including from tariffs and trade uncertainty." JPM shares are up 17% since May 1.
- Wells Fargo (WFC) dropped 2.3% despite earnings per share of $1.60, which beat the consensus of $1.41. Investors appeared disappointed with a 2% drop in net interest income during the quarter and the company's forecast for flat net interest income growth this year. The company pointed to what it said was strong credit performance and the strength of its commercial and consumer customers.
- Citigroup (C) edged higher after earnings per share of $1.96 beat the consensus of $1.60. Revenue rose 8%. The markets division had its best second quarter since 2020, driven by equities trading. Banking revenue rose 18% and wealth revenue was up 20%. The company issued guidance in line with expectations.
- BlackRock (BLK) fell nearly 2% in pre-market trading, though its earnings per share topped Wall Street's estimates. Revenue fell just short of the average estimate, but assets under management climbed to a new record high.
- Bitcoin (/BTC) dropped 2.3% early Tuesday after hitting record highs yesterday as "Crypto Week" loomed in Washington. Stocks related to crypto, including Strategy (MSTR), Circle Internet Group (CRCL), and Coinbase (COIN) fell 1% to 2% after rising yesterday. Strategy also got a lift yesterday as TD Cowen raised its price target, saying "no one will be able to match let alone beat Strategy's cost of capital advantage," according to CNBC.
- Royal Caribbean (RCL) edged lower early Tuesday after hitting a new all-time high Monday amid positive sentiment about the cruising industry following strong results from competitor Carnival (CCL) late last month. Carnival also rose yesterday.
- Netflix (NFLX) flattened after rising more than 1% yesterday. Investors seem optimistic ahead of its earnings report Thursday afternoon.
- Trade Desk (TTD) soared 14% after the ad platform firm was added to the S&P 500 index. AppLovin (APP), which Barron's said is one that investors thought would be added but didn't make the cut, fell 1.7%. AppLovin and Palantir (PLTR) both slipped in early trading after rising sharply yesterday amid general tech strength.
- Chances of a Fed rate cut later this month were 3% early Tuesday after the CPI data, according to the CME FedWatch Tool, and odds of at least one cut by September were around 61%.
- A negative technical signal appeared on the charts late last week as the S&P 500 index achieved new all-time highs at the same time as the Relative Strength Index (RSI) for the SPX fell slightly. "The set-up on the S&P is looking eerily similar to July of 2024, which was met with a subsequent sell-off," said Nathan Peterson, director of derivatives analysis at the Schwab Center for Financial Research. "Seasonality turns more bearish as we get into the back half of July, so I read the technical tea leaves through cautious eyes."
- Market breadth remained positive as the week began with about 70% of S&P 500 stocks above their respective 50-day moving averages. Utilities, materials, and energy performed well last week, pointing toward more defensive positioning. Exchange-traded fund flows stayed positive, though they tailed off a bit.
More insights from Schwab
What's emerging: So far this year, the MSCI Emerging Markets Index has outperformed despite the trade war that targets China, the largest weight in the index. A weaker dollar is helping global growth, but it's important not to characterize all EM investments the same way, Schwab explained in a new analysis.
Chart of the day
Data source: CME Group, Nasdaq, Cboe. Chart source: thinkorswim® platform.
Past performance is no guarantee of future results.
For illustrative purposes only.
The recent 40% rally in Bitcoin futures (/BTC—candlestick) occurred as the Cboe Volatility Index (VIX—purple line) fell 44% on a spot basis over the last three months. By comparison, the Nasdaq Composite ($COMP) rose about 22% over that time frame. Over the last few years, rising VIX has seemed to correspond with lower bitcoin to some extent, but they don't always move in sync. Lower volatility in the stock market often reflects market participants' confidence in risk taking, which could explain why there might be a relationship to the recent divergence between bitcoin and VIX.
The week ahead
Check out the Investors' Calendar for a summary of the top economic events and earnings reports on tap this week.
July 16: June Producer Price Index (PPI), Fed Beige Book, and expected earnings from ASML (ASML), Bank of America (BAC), Goldman Sachs (GS), Johnson & Johnson (JNJ), Morgan Stanley (MS), Alcoa (AA), and United Airlines (UAL).
July 17: June retail sales and expected earnings from Abbott Laboratories (ABT), Marsh & McLennan (MMC), PepsiCo (PEP), Taiwan Semiconductor Manufacturing (TSM), Travelers Companies (TRV), and Netflix (NFLX).
July 18: June housing starts, June building permits, July preliminary University of Michigan Consumer Sentiment, and expected earnings from 3M (MMM) and SLB (SLB).
July 21: June leading indicators and expected earnings from Cleveland-Cliffs (CLF), Domino's Pizza (DPZ), and Steel Dynamics (STLD).
July 22: Expected earnings from Coca-Cola (KO), General Motors (GM), Halliburton (HAL), Lockheed Martin (LMT), Northrop Grumman (NOC), Philip Morris (PM), Sherwin-Williams (SHW), Capital One (COF), and Texas Instruments (TXN).
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