The most common traps retail investors fall into after CPI data is released

is equating “no more rate hikes” directly with “rate cuts soon”
US core CPI year-on-year in June came in at 2.6%
below the 2.8% expectation and the prior 2.9%
Month-on-month it printed 0%, also below the market’s 0.2% forecast
Overall CPI also fell from 4.2% to 3.5%
This data does reduce the necessity for further rate hikes
but it’s nowhere near enough to confirm the start of a rate-cut cycle
This round of disinflation is largely due to falling energy prices
and energy is precisely the variable most likely to be pushed back up by geopolitical conflicts
Going forward, don’t obsess over the probability of rate cuts
Focus on two key signals
Whether the 2-year US Treasury yield can keep trending down
and whether the Nasdaq 100 ETF can hold onto the gains after the CPI release
If yields fall but tech stocks can’t move higher
the market’s core concern will shift from inflation to economic growth
A pretty CPI print can only move one layer of pressure
and will never automatically trigger a new bull market.