Wall Street spent yesterday celebrating a 3.4 percent inflation print, a number that in 2019 would have been called an emergency.
Good morning and welcome to today's market chronicle. It's Thursday, August 13, 2026.
The consumer price index rose 0.1 percent in July, 3.4 percent on the year, core at 2.5 percent, all of it exactly what everyone had already written down. The S&P 500 closed up 0.26 percent at 7,749, the Nasdaq added 0.54 percent to 26,588, and the Dow fell 0.04 percent, which in the wonderful world of finance passes for a difference of opinion. Super Micro Computer ($SMCI) and CoreWeave ($CRWV) both jumped 19 percent on results, because the AI trade still knows exactly one gear. The story sold overnight was that inflation is handled and Kevin Warsh can go back to being decorative. Translation: nothing got worse, so we bought. And yet everyone is pretending not to notice that the applause was for a number nearly double the target, printed in the middle of an energy shock that has not finished passing through anything, under a Fed chair whose debut meeting stripped the easing bias out of the statement and left nine of eighteen participants on record for a hike this year. So who actually won yesterday? The people who needed the print not to be hot. That is a much smaller group than the people who need inflation to be over, and they are not the same trade.
At 8:30 the producer price index lands, expected up 0.2 percent on the month and near 4.9 percent on the year, down from 5.5 percent, which is the kind of progress that only looks like progress standing next to the previous number. Jobless claims arrive in the same breath, 202,000 against 199,000, a labor market that refuses to fire anyone while somehow also refusing to hire. Applied Materials ($AMAT) reports after the close with options pricing a ten percent move, the stock around $539 and some 27 percent below its high for the year. The picks and shovels of an unstoppable boom, down a quarter. Really?
The desk is long Centene ($CNC), entered six sessions ago at $64.19, last $67.07, up 4.5 percent against 0.15 percent for the S&P 500 over the same stretch. The setup was the health benefits ratio, 89.6 percent in the second quarter against 93.0 a year earlier, a six point swing that turned a losing period into a billion of net income. It is working. Six sessions is not a verdict, and that is the whole of what can honestly be said this morning.
Gold is quoted around $4,390, with this morning's reads drifting ten dollars either side, so treat the last digit as decoration. WTI sits at $82.11, off 1.4 percent. Bitcoin is near $63,800 after closing Wednesday at $63,402, having responded to the tamest inflation print in months by doing nothing whatsoever, which was frankly the most honest reaction available. S&P futures hover around 7,770, up a whisker, and the 10-year yield is 4.67, easing a basis point into the PPI.
The market has decided inflation is a scheduling problem, solvable by waiting for the next print. See you tomorrow.