The Stock Market just FLIPPED AGAIN..

We have some major developments for the stock market today, including CPI, which was actually a little bit of a disappointment, and we're going to get into that at the top of today's video. But there are a lot of other developments as well. I don't want to waste your time here. The only thing that I ask you to do is hit the like button for the YouTube algorithm to help push this video out to more people that need to see it. So, first and foremost with your CPI report, if we take a look at core CPI month overmonth, this came in at 0.22% in July. This was not a disappointment in the sense of it came in higher than expected. It came in in line with expectations. And for what seems to be the past couple of weeks, people have kind of been positioning for a better thanex expected CPI report. And it makes sense because last month was actually negative for uh core CPI. This was in line with expectations. That means that some banks like Barlays and PNB Parabos and Deutscha Bank and Moody's Morgan Stanley UBS and Wells Fargo they were actually higher their estimates were higher than 0.22% 22%. But TD Securities, Namra, uh JP Morgan was right on Goldman Sachs and Employee America, Cityroup, Citadel Securities, Bank of America. They were expecting a CPI report that was lower than the number that we got today. So, it's not as clear that this is a positive development. It's not the end of the world by any means necessary, but it's not that good either. That still puts you at a running kind of annualized rate of inflation at 2.64%. Which is kind of where we've been. And part of the strength today in uh your CPI report was core goods. Core goods prices rose 0.2% 2% in July in the CPI following two months of declines. This was the largest month-over-month rise since September of 2025. Shelter, though, was soft at positive 0.14%. Core services excluding shelter was 0.19%. The price level was below May because of a larger June decline. And so you can see we're still on a downwards trajectory, but just not as quickly as some were expecting. And if we take a look at your indexes, the Russell 2000 is up 0.17%. NASDAQ 100 is the real winner, up 0.91%, NASDAQ up 0.5%, S&P's up a quarter of 1%, and the Dow is about break even today. 10-year Treasury yields are are down about one and a half basis points and oil is down about a third of 1%. So from an index level, it actually looks like you are having a really good day in the markets today, but that's not exactly the case. If you look at something like the heat map, there's a lot of green in your semiconductor trade. And uh we'll talk about why specifically in just a moment, but software not doing great today. Software infrastructure, Microsoft, Palanteer, not doing well today. Communication services, yeah, not doing well. Cyclical is not doing well. Healthc care is kind of a a mixed bag. Industrials, again, kind of a mixed bag. Financials, a mixed bag. Consumer defenses, energy, basic materials not doing very well either. So, there is a lot of red out there even though the indexes are moving higher. And that's again because of semiconductors today. There are a couple of reasons for this outperformance within semiconductors today. Um first and foremost, Nebius is up 20% following their earnings. Their revenue grew like 500% year-over-year. So it was much better than expected. The stock is reacting positively to that. Same is true with Coreeave. Coreweave is up about 18% today following their earnings. But again, for both of these stocks, Nebius and Coreweave, yes, they did they did great, but they were they were down a lot. So the so the bar was inevitably lower heading into earnings. Corwe was down 50% from highs before they reported earnings. So that's a big part of it. And generally, you know, AI hardware stocks, they have come under a lot of pressure recently. So when you get a CPI report that's not super exciting, that's not lower than expected, you and you get good, you know, NeoCloud earnings. It it it does push capital into AI hardware, especially considering the news that we will talk about here in just a few moments on the current state of things with Iran. AI hardware stocks benefit from this ongoing conflict with Iran. And I maybe that's the bad the wrong way to put it. They don't benefit per se, but they're least affected. Right? So if you have to be invested in the markets, do you want to own a Delta Airlines as very exposed to oil prices or do you want to own Nvidia? Which company is more vulnerable to the conflict and oil prices and the Fed raising rates? Obviously Delta Airlines, right? So it it it is a bigger or lesser negative for AI hardware. Now, you also had Citadel yesterday that said, quote, "We believe s systematic buyers are getting ready to load up on stocks again after a massive unwind." And uh a here says, "Scare everyone into a rate hike. That wouldn't happen. Crash the AI trade and pick up the best names at dirt dirt cheap levels. Pump the AI trade again to benefit." Ruthless. But again, I still don't think AI hardware FOMO is coming back. And I'll explain that later on in this video. You can actually see a chart here of the cost of insuring against default by AI hyperscalers has hit record levels. Now, following today's CPI report, you can see the probability of a rate hike September 16th went down from 47.4% 4% yesterday, down to 37.7% today. So, it fell about 10% and um this is likely going to keep the Fed on hold and you're actually pricing in the highest probability of a pause for October 28th as well. So, I think this is a trend that we will continue to see as more data comes out, as CPI comes out, as more jobs reports come out. you're just going to slowly price out Fed rate hikes and I think that is a positive for the broadening trade of this market. We do have some earnings today in after hours as well from Cisco inflection coherent and Sarah Boss and then tomorrow JD.com and Tapestry in the morning and then in after hours applied materials and figure we do have a lot of headline news as well so I will get into that now. Pakistan says US Iranou deadline can be extended. Pakistan says a larger peace process is stalled and hopes to resume soon. A senior Iranian source to Reuters says there are no discussions over extending the ceasefire between Iran and the US. Quote, "From Iran's perspective, there is no ceasefire start date, therefore nothing to extend." Iran says the US violated the interim pact 48 hours after it was reached and withdrew from it a few days later. Iran also floated prolonging the war until Trump leaves office to impose costs and strengthen deterrence, said a senior IRGC adviser um who claimed Iran is winning while accusing Washington of lacking a clear strategy. He said the longer the conflict continues, the more Iran learns about fighting US forces. He also claimed that Iran is producing missiles faster than it is using them. And again, I know I didn't cover the other aspects of the CPI report earlier, but they all came in line with expectations. For headline, it was 0.1% month- over-month in line with the estimate. Uh year-over-year was 3.4% in line with the estimate. And then obviously core was 0.2% in line with the estimate. And uh core year-over-year was 2.5% again in line with the estimate. So typically when you have a market that's where small caps are rallying, software is rallying like cyclicals and all these other areas meeting expectations is usually going to give you a sell the news event and that's what it appears is happening today. US super core month overmonth though came in at 0.189% which is um better than the headline core. The previous month was negative0.20%. Goldman Sachs says the July CPI report supports a September hold. Bard analyst Ross Mayfield says a softer core inflation and limited wage pressure strengthen the case for the Fed to hold rates steady in September. Yardini today lifts his S&P 500 target to 8,400. And Google raises prices of their new phones about $100 a piece on quote severe memory crunch. Donald Trump says this morning, "We have total control over the Straight of Hermoose. I think we will keep it." Donald Trump says Iran cannot challenge US naval blockade. Everyone calls it a wall of steel. Trump says Iran has no money, faces 300% inflation, and is quote all talk and no action. Now again, even though AI hardware stocks are higher today, I think this is a bit of a pump fake, I don't think this is sustainable at this point. As I have said many times now on this channel, some AI hardware can do well. I'm quite bullish on Marll. I'm quite bullish on Qualcomm here. I'm quite bullish on AMD but even Broadcom for that matter you know custom silicon I think that's going to be uh you know doing well over time you have to understand we have seen FOMO in AI hardware we have seen overleveraging we have seen funds go from $45 billion to basically zero in this trade I have never once seen a trade see that much FOMO the FOMO collapse and FOMO come back. I've never seen a sector go through FOMO twice. It's ne I I I don't know if it's ever happened before, right? It just doesn't happen. Not this degree of FOMO and leverage and overcrowding. Now, you're also going to run into the issue of the law of large numbers. These companies are in such explosive hyperrowth mode. The the growth rates are going to slow down. You know, Nvidia last quarter grew at 80%. It's not going to grow at 80% a year from now. Highly unlikely, right? Same goes for all of them. So, you kind of have a lot working against them at that point. And inevitably, the war with Iran will end. Wall Street will figure out that, you know, the the um the new Fed share is actually a dove and inflation will continue to come down in my view. And these are all positives for the broader market. So I think while everyone was overweight AI hardware and it it's come down a lot recently. So on a day like today, I'm not surprised that it's coming back a bit, I I don't think it is something that is sustainable. And I do think Wall Street will be taking profits in AI hardware as quickly as they possibly can. They will be taking a profit if these stocks do continue to rise. Now, just to give you a little bit of a heads up of what to expect tomorrow for your economic data, you do have Fed Hammock that speaks tomorrow morning at 8:15 in the morning. You have PPI month over month, core PPI month overmonth and initial jobless claims for last week, all tomorrow. And then Fed Barkin speaks at 8:40 in the morning. Heading into Friday, you have retail sales month overmonth and then your Michigan consumer sentiment survey. So, ladies and gentlemen, let me know your thoughts on all of this down below in the comment section. Hit the like button as well as subscribe to the channel if you guys have not done so already. Have a fantastic rest of your day and I will see you in the next