Good afternoon and welcome to Markets Desk.
June consumer prices came in softer than expected, sending the dollar index down nearly a third of a percent on the session. The benign inflation print immediately reduced the probability of a Fed rate hike at the upcoming FOMC meeting, giving equity and bond markets a modest tailwind as traders repriced the rate path lower.
Shifting to energy, crude oil climbed one and a half percent to post a one-month high, with gasoline futures not far behind at a one and a half month high. The driver here is geopolitical — ongoing US-Iran hostilities are keeping a floor under supply risk premiums, and that tension appears durable enough to sustain the bid even as demand signals remain mixed.
And on the consumer side, shares of Yum Brands fell nearly four percent Tuesday after reports emerged that health officials are investigating Taco Bell in connection with a spreading cyclosporiasis outbreak. That is a parasitic illness linked to contaminated produce, and the reputational and operational exposure for the brand is real — investors are clearly pricing in meaningful near-term risk to foot traffic and sales.
That's the tape. Markets Desk, signing off the floor.
