Market Eyes Inflation Data
Economists surveyed by Dow Jones predict a 0.1% month-over-month rise and a 2.6% increase year-over-year in core PCE. Traders hope this report will signal easing inflationary pressures, potentially prompting the Fed to reduce interest rates later this year. A disappointing PCE could lead to stagflation concerns, while meeting or surpassing expectations could set a positive tone for July, a historically strong month for markets.
Artificial Intelligence and Market Sustainability
Investors are also assessing the sustainability of the artificial intelligence (AI) trade. There is speculation on whether AI will continue to drive the market or if the rally needs to expand to other sectors. CNBC Pro strategists expect the S&P 500 to end the year barely higher than current levels. A recalibration may be needed for an overbought market dominated by a few mega-cap stocks, potentially leading to volatility but also creating opportunities in undervalued sectors.
Earnings Disappointments Impact Stocks
Several notable stocks declined after earnings reports. Micron fell over 5% following revenue guidance aligned with expectations. Levi Strauss dropped 15% due to disappointing quarterly revenue, and Walgreens Boots Alliance plummeted 21.1% after lowering its full-year outlook and reporting weaker-than-expected earnings.
Hims & Hers Faces Scrutiny
Telehealth platform Hims & Hers Health saw an 8% drop after a report by Hunterbrook Media raised concerns about the company’s weight loss drug sales. The stock has surged over 142% year-to-date, driven by high demand for anti-obesity drugs like Novo Nordisk’s Wegovy and Eli Lilly’s Mounjaro, despite ongoing lawsuits over knock-off versions of these medications.
