Stocks closed at fresh highs as an in-line CPI print cleared the path to a September hold and blowout AI-infrastructure earnings reignited the tech trade.
July CPI matched consensus at 0.1% headline and 3.4% year-over-year, with core at 0.2% and 2.5%, removing the tail risk of a hot print derailing rate-cut odds. That cleared the runway for earnings to drive the tape: CoreWeave, Super Micro and Nebius all posted double-digit pops on beat-and-raise numbers, dragging the Nasdaq up 0.54% to 26,588 while the S&P added 0.26% to 7,748.50. The Dow lagged, essentially flat, as mega-cap software names like Microsoft and IBM sat out the rally. VIX broke below 15 to 14.55, down nearly 5% on the day, confirming a vol-compression, positive-gamma tape rather than a broad risk repricing.
SPX closed comfortably inside its indicative 7700-7800 corridor, still capped by the call wall and well above the zero-gamma flip near the high 7600s/low 7700s, keeping dealers net long gamma and the tape prone to pinning rather than trending. QQQ closed above its flip and is pressing toward its call wall, a setup that favors fade-the-rip behavior into resistance unless volume actually breaks the wall on a closing basis. Breadth was AI-infra and semis led, with legacy mega-cap software the relative laggard.
The risk: Thursday's PPI print and a Fed speaker on the tape are the next catalysts that can force gamma to flip. A hot PPI or hawkish comments push spot back toward the flip and unwind the low-vol pin fast, while lingering Strait of Hormuz headline risk keeps a geopolitical bid under oil that could resurface as an equity headwind overnight.