Core inflation cools despite the Iran war — grab the stock market relief rally
The newest inflation report shows prices are still rising fast due to the war, but the 'core' rate (which leaves out wild food and gas prices) actually cooled down. This means Wall Street is less worried about the Federal Reserve aggressively hiking interest rates, so stocks are bouncing back.
Idea
The overall stock market has been beaten down by fears of out-of-control inflation and rising interest rates. However, the latest data reveals that underneath the expensive gas and groceries, the underlying inflation trend is actually improving. Because Wall Street panicked before this number came out, this calmer reality is acting like a breath of fresh air for investors. As the fear of aggressive rate hikes fades, money is flowing right back into the broader stock market. Buying a major index like the S&P 500 or Nasdaq captures this sudden wave of relief and market optimism.