WS #12038

The dominant signal in this window is the US June CPI data, which came in significantly below expectations: headline CPI fell 0.4% MoM (est. -0.1%) and rose 3.5% YoY (est. 3.8%), while core CPI was unchanged MoM (est. +0.2%) and rose 2.6% YoY (est. 2.8%). This disinflation surprise is a major counter-signal to the prevailing Fed rate hike narrative, likely reducing the probability of a July hike and boosting rate-sensitive sectors. The data was released at 12:30 UTC and is corroborated by multiple sources (pro-wire, Bluesky posts). Separately, the IBM earnings disaster continues to dominate, with shares down ~23% pre-market, now confirmed as IBM's worst single-day drop since 1987. The IBM miss is dragging software stocks (NOW, WDAY) and is being cited as evidence of enterprise software spending pullback in favor of AI infrastructure. The US-Iran/Hormuz situation remains escalated, with oil above $86 and Polymarket showing active trading on Hormuz toll and conflict outcomes. Fed Chair Warsh's testimony is ongoing, with remarks emphasizing no tolerance for persistent inflation and strong productivity growth, but the CPI data likely overshadows his comments. Bank earnings (JPM, GS, C, BAC) all beat, but stocks are mixed, with JPM sliding on expense guidance. Keybanc's Apple downgrade to Underweight is a MAG7 carve-out signal. New York Governor Hochul is expected to sign an executive order imposing a one-year moratorium on large data center construction, which is bearish for data center REITs and related plays. HCA Healthcare lowered its annual outlook, dropping 10% pre-market.