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MORNING BID AMERICAS-Melting core
Jul 15, 2026 3:57 AM

(The opinions expressed here are those of the author, a

columnist for Reuters.)

By Mike Dolan

July 15 (Reuters) -

What matters in U.S. and global markets today

By Mike Dolan, Editor-at-Large, Finance and Markets

A torrent of new information hit markets on Tuesday, with a

mostly positive tilt for both stocks and bonds.

A surprisingly large decline in U.S. consumer price inflation

for June soothed interest rate hike nerves, with the headline

drop clearly tracking big swings in energy prices.

I'll get into that and more below.

But first, check out my latest column on one way that Europe is

looking to rein in China's humming export engine.

And listen to the latest episode of the Morning Bid daily

podcast, where we discuss June inflation, corporate earnings and

more.

Subscribe to hear Reuters journalists discuss the biggest news

in markets and finance seven days a week.

MELTING CORE

The drop in headline U.S. inflation may well be reversed in July

given the resumption of hostilities in the Gulf, but the first

drop in monthly core CPI in more than six years - a marginal

fall of 0.02% - takes the annual core inflation rate down to

just 2.6%.

Futures have wiped out almost all chances of a Federal

Reserve rate hike later this month as a result, and Treasury

yields fell back sharply.

Fed Chair Kevin Warsh gave little away in his congressional

testimony on Monday but restated the Fed's determination to get

inflation back to its 2% target.

The corporate earnings season also kicked off in earnest, with

the big banks all doing well on a mix of volatile market trading

and big fee paydays from a wave of IPOs. Goldman Sachs' stock

was the pick of the bunch as it surged 9%.

It was more mixed in the tech world. IBM plunged 25% in its

biggest one-day drop on record after a big miss and an admission

that it had flubbed the switch of business trends from software

services to AI data centre buildouts.

It also said that AI spending was eating into customers'

software budgets. That caught many software service stock prices

in the slipstream of IBM's own slide.

But Europe's ASML reported blockbuster results on Wednesday, and

much like TSMC's sales update earlier this week, the chip

manufacturer highlighted continued chip sector demand as it

upped its annual revenue forecasts yet again.

World oil prices continued to bubble back up above $85 a barrel,

meantime, as U.S.-Iran hostilities persisted even as President

Trump U-turned on plans for a 20% toll on Hormuz shipping. A

resumption of the blockade on Iran's ships goes into effect

today.

Elsewhere, China's second-quarter GDP growth slowed to a

below-forecast 4.3%, although June industrial and retail updates

were above estimates. The yuan firmed. Asia stocks are up more

broadly, as are U.S. stock futures ahead of Wednesday's bell.

Chart of the day

U.S. consumer inflation slowed more than expected in June as

energy prices retreated, but there was also the first drop in

monthly core prices, which exclude volatile energy and food, in

more than six years.

Weighed down by a surprisingly big drop in auto insurance as

well as declines in communication, healthcare and hotel room

prices last month, the monthly core CPI index actually declined

- albeit by a sliver at -0.02%, rounded up to zero in some

reports.

But while the report appeared to quash market speculation

about a Fed rate rise as soon as this month, it didn't dispel

futures market pricing for a hike later this year. And annual

price gains across a range of sectors are still far in excess of

the Fed's 2% target - a target that Fed Chair Kevin Warsh

insisted would be met by the central bank, come what may.

Today's events to watch

* U.S. June PPI (8:30 a.m. EDT), New York Fed manufacturing

survey for July (8:30 a.m. EDT)

* Fed issues Beige Book (2 p.m. EDT)

* Fed's Lisa Cook, New York Fed's John Williams and St.

Louis Fed's Alberto Musalem speak

* U.S. corporate earnings: BlackRock, BNY, Morgan Stanley,

Johnson & Johnson

Want to receive the Morning Bid in your inbox every weekday

morning? Sign up for the newsletter here. You can find ROI on

the Reuters website, and you can follow us on LinkedIn and X.

Opinions expressed are those of the author. They do not reflect

the views of Reuters News, which, under the Trust Principles, is

committed to integrity, independence, and freedom from bias.

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