We have lots of big stock market news ahead of today’s opening bell: Q2 earnings season shifts to a new gear with several of the top banks on Wall Street reporting, aggressions continue to boil in the Strait of Hormuz after more U.S. bombs strike Iran’s interior, and June inflation data takes a downward route for the third-straight month.
June CPI: 1st Negative Print Since Covid Era
For the first time since May 2020 — when the Covid pandemic was busy hitting the U.S. economy for a third-straight month — the Consumer Price Index (CPI) for June came in negative: -0.4%. This is a deeper cut than the -0.2% analysts had been expecting and a big drop from the +0.5% reported for May. It’s the lowest figure since April 2020’s -0.8%.
The Memorandum of Understanding (MOU) between the U.S. and Iran was signed on the 17th of June, and with that the Strait of Hormuz was again able to see oil tanker traffic pass in and out of the Persian Gulf. Global prices of crude oil dropped -21% as a result, as the Mideast oil trade normalized, which led to a -5.7% drop in monthly oil prices in this morning’s CPI report.
Subtracting volatile food and energy costs, core CPI month over month was flat in June — better than the +0.2% consensus, which had matched May’s unrevised tally. This equals January 2021, just ahead of the Great Reopening, which saw prices soar once the pandemic began to abate. (We also had no CPI data for October or November of 2025, due to the lengthy federal government shutdown.)
Year over year, not only does headline CPI (aka “the Inflation Rate”) thankfully sink back below 4% after May’s +4.2% — which was the highest in three years — but it goes back near March lows: +3.5%. This is -30 basis points (bps) below estimates. Core CPI year over year also dipped -30 bps from the +2.9% expected and reported for May, matching March’s level.
These numbers could not be reasonably expected to have performed better in our current economic climate. That said, these are necessarily backward-looking figures, and now that the Strait of Hormuz appears ready to close again, it’s unlikely these complimentary June CPI results will hold at these levels in the near term.
Q2 Earnings Parade Begins in Earnest: JPM, C, BAC, WFC, GS
One early non-tech beneficiary of the heady AI trade over the past year has been the big banks, as we see from this morning’s Q2 earnings results. Leading firm JPMorgan Chase JPM posted a +9.8% earnings beat this morning, with earnings per share of $6.14 on $57.35 billion in quarterly revenues, up +16.7% from expectations.
Citigroup C performed even better on its bottom line: earnings of $3.15 per share outpaced the Zacks consensus by +15.8%, while revenues of $24.77 billion topped expectations by +4.59% for Q2. Pre-market shares are selling -2% on the news, but had gained more than +20% year to date.
Zacks Rank #3 (Hold)-rated Bank of America BAC posted earnings of $1.21 per share versus $1.13 projected, and +34% year over year. Revenues also outperformed expectations, but by less-gaudy numbers than JPMorgan or Citi: $31.56 billion versus $30.62 billion estimated. The Charlotte-based bank has only missed earnings estimates once in the past five years.
Wells Fargo WFC shares had initially gone up on the Q2 report, but are soft ahead of the open. Earnings of $1.96 per share beat estimates by +13.3%, while revenues of $22.62 billion was +3.76% ahead of forecasts. Net interest margins were squeezed in the quarter, however, leading investors to put a check on the stock for now.
Top investment bank Goldman Sachs GS crushed earnings estimates in its Q2 results ahead of the open, with earnings of $20.98 per share nearly doubling year over year, and zooming past the $14.47 billion in the Zacks consensus. Revenues of $20.34 billion posted an eye-opening +23.3% beat over estimates.
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This article originally published on Zacks Investment Research (zacks.com).