Stocks, Treasuries Extend Rebound on PPI Miss, Cheaper Oil: July 15, 2026 — 2026-07-15
What moved & why: A second consecutive lighter-than-expected inflation report (June PPI headline -0.3% m/m vs. 0% est., 5.5% y/y vs. 6.2% est.) combined with falling oil prices drove a broad risk-on rally, pushing back Fed rate-hike expectations and triggering a bull-steepening yield curve.
Cross-asset:
- Equities: S&P 500, Dow, Russell 2000 all advancing; Nasdaq 100 down ~1% on semiconductor selloff (memory chips hit hard), but 6 of 7 Magnificent 7 names up, 5 of them >3%; 7 of 11 sectors advancing.
- Rates/Treasuries: Yield curve descending in bull-steepening fashion, led by shorter tenors; October now priced as initial 2026 hike, September odds slightly below 50/50; bonds bullish on anemic housing costs and disinflationary trends.
- Dollar: Depreciating as yields fall and steady policy odds rise.
- Oil/commodities: WTI crude plunging from $80/bbl resistance; commodities retreating broadly despite loosening financial conditions.
- Crypto: Risk-on sentiment driving buying; hedges being unloaded as volatility premiums compress.
Econ / Fed angle: PPI miss driven by cratering fuel, food, and transportation costs; shelter costs (rent, valuations) slowing sharply, reversing negative in many sunbelt areas. Chair Warsh cautioned against declaring victory on inflation despite two consecutive misses, reaffirming commitment to 2% target. Market now pricing potential headline to mid-2s by year-end, opening door to 2027 rate cuts.
Watch next: Housing sector trajectory and energy cost persistence; international growth (China GDP missed 4.5–5% target at 4.3% y/y; mixed June data on retail/industrial vs. weak investment/loans); Fed communications on disinflationary progress.