Equity futures were already higher, especially the NASDAQ Composite, when the Consumer Price Index (CPI) news release hit the tape. For the remainder of yesterday’s session, headlines read “subdued CPI sends stocks higher,” which is misleading. It's true that a report with a whiff of inflationary pressure would indeed have sent the market lower, and there are few impediments to a full-on summer rally more daunting than the possibility of a rate hike. Still, certain stocks were poised to take off.

Pretty Good...The S&P 500 (SPX) moved closer to another record high, as money flows have turned higher.

Eight of eleven sectors finished the session higher, led by Real Estate (XLRE) and Technology (XLK). Interestingly, Consumer Discretionary (XLY) trailed, even though Main Street will get the biggest break with no rate hike. Still, three of the top four gainers were defensive by nature.

Factors

Momentum is gaining…momentum (couldn’t be helped).

This rally is all about earnings and profits, the likes of which we have never seen. The question is: for how much longer can this window of magnificent re-ramping stay open? I think a lot longer than most imagine.

After the close, Coherent Corp (COHR)  posted a strong report - it's another key artificial intelligence (AI) buildout company that’s not a household name, but an important part of the value proposition mosaic.

Today’s Session

This morning, the Producer Price Index (PPI) came in below consensus on the headline, both year-over-year and month-over-month, while core (excluding food and energy) year-over-year came in at 4.2, against a consensus of 4.1. 

Ultimately, a win for the market, and bond yields are lower.

It will be interesting to see all those Wall Street mavens still push for a rate hike, complaining about prices when portfolio management fees are over the moon.