Twelve days ago I promised a full outlook after CPI. The market then spent twelve days making sure anything I wrote would expire before you finished reading it. So here's what actually happened instead lol.
CPI finally cooled. It's down 0.4% on the month, the biggest monthly drop since April 2020, with the annual rate falling from 4.2% to 3.5% against 3.8% expected. Core at 2.6%. The boat finally got bumped in the friendly direction: stocks rallied, yields fell, hike bets got shoved out to December, and the group chats went from eulogies to victory laps in a single afternoon.
The victory lap lasted about a day. By Friday, chips (untouchable in June, remember) were in an actual bear market, the industry gauge down 20% from its record, after Chinese startup Moonshot AI released a model it says narrows the gap with the top US labs. One model release, one bear market. Then the weekend went full contact: fresh US strikes, tankers hit near Hormuz, Tehran declaring the Strait closed (obviously on a weeekend, no market manipulation they swear) and Brent ran from $76 on Sunday to $91 by yesterday. And then Tuesday the tape shrugged: Micron up 12 (Micron moving double digits is just how it says hello now), Sandisk up 14, AMD up 8 on a Microsoft AI deal, losing streak over, everyone calm again.
Here's the part worth keeping: that beautiful CPI print was made of cheap oil. Gasoline fell 9.7% in June, energy fell 5.7%, that IS the disinflation, and it was borrowed from a ceasefire that no longer exists. June's number was produced by oil prices that are gone. The Fed sits down next Wednesday holding a cooling CPI while the screen in front of it says $91 and the Strait says closed. The next print mechanically puts the war back in. The market spent this week celebrating a photograph of a price that's already left.
The rates market figured this out fast: hike odds did a full round trip — mid-30s before CPI, crushed by the soft print, back to a coin flip once Brent went vertical. Warsh's last public words on the subject were "prices are too high." That was before the Strait closed.
Earnings are the one clean spot, nearly nine in ten S&P names that have reported have beaten, 3M and GM both jumped on theirs, and tonight Alphabet and Tesla walk straight into the AI-spending debate that just put semis in a bear market. So, the outlook I owed you, in one line: same boat as June, crowded, headline-steered, no margin of safety, except now the rudder is wired to a $91 barrel of oil, and the index is still floating about a percent off its highs as if none of it happened. Two weeks ago I said the market had convinced itself bumps don't count. Next Wednesday, the Fed tells us whether it agrees.... Show More
Not investment advice. The author may have financial interests in the mentioned instruments.
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Sun Sep 13 2026 04:38:48 GMT+0000 (Coordinated Universal Time)
