Gotrade Daily: US Inflation Cools, Big Banks Post Records

Softer US inflation lit a Wall Street rally, and Q2 earnings season just opened with five big banks. Tonight it is ASML, Morgan Stanley, and BlackRock.

Wall Street closed higher on Tuesday (14 Jul). The Nasdaq led, up 0.90% to 26,107, followed by the S&P 500's 0.38% gain to 7,544. The Dow was nearly flat (+0.02%) as IBM plunged roughly 25% on a profit warning.

The trigger was one thing: cooling US inflation. June CPI fell 0.4% month-on-month and eased to 3.5% year-on-year, below market expectations. The read strengthens conviction that the Fed holds rates at its 29 July meeting.

At the same time, Q2 earnings season opened with five big US banks reporting at once. All beat estimates, though their stock reactions split.

Tonight's Watchlist 📈

Tonight's Catalysts 🧨

ASML is the bellwether for AI chip spending

ASML reports before the open. Demand for its EUV lithography tools is a signal for the entire AI semiconductor supply chain. Strong order numbers could ease fears that the AI rally has outrun its fundamentals, the same worry that pressured Arm and Korean chip stocks a day earlier.

Morgan Stanley and BlackRock are next

Morgan Stanley (wealth-management flows and investment-banking fees) and BlackRock (AUM and ETF inflows) carry the bank-earnings story forward tonight. Strong results could extend the positive sentiment set by Goldman and JPMorgan.

Inflation versus the rate path

Even with CPI cooling, this is still a tightening-leaning regime, not an easing one. Odds of a September hike fell to about 63% from 75% a day earlier. That is the data driving risk appetite tonight.

Pre-Market Pulse 📊

Focus is on the pre-market reports from ASML and Johnson & Johnson. Beyond the banks, IBM remains a drag after its 25% drop, while semiconductor names trade in both directions amid the AI tug-of-war.

Macro Note 📝

June's CPI cooldown was driven largely by lower energy prices after the Iran ceasefire and the reopening of the Strait of Hormuz. The 10-year Treasury yield stays elevated near 4.6%, so this "relief" is about the Fed holding, not a signal of cuts.

Conclusion

Tonight is the next test: whether bank-earnings strength extends to Morgan Stanley and BlackRock, and whether ASML confirms AI chip demand is still solid. Cooling inflation plus strong corporate profits give a positive footing, but tech-sector valuations remain vulnerable to a pullback.

For investors, this is a moment to watch the quality of earnings, not just the direction of the index. What stocks are you watching tonight?

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