Morning Brief: Modest CPI Upturn Dovishes Hawkish Bets; US‑Iran Talks Stall, Oil Prices Stabilise

Core Snapshot

📊 US July CPI rose 3.4% YoY and 0.1% MoM, in line with consensus while core inflation remained contained. Market‑priced odds for a September rate hike have retreated.

🕊️ Washington and Tehran accuse each other of breaking prior agreements; peace talks to end the Gulf war hit an impasse. Trump asserts the US holds “full control” over the Strait of Hormuz.

I. Market Outlook

Key Events

‑ 🕊️ US‑Iran peace negotiations stall: Sources point to deep‑seated disagreements over a permanent Gulf‑war ceasefire. Discussions aimed at reviving June’s interim deal yielded no tangible progress. Trump stated the United States exercises “full control” over the Strait of Hormuz. → WTI crude +1.30%; Brent crude +1.36%, oil prices stabilised.

Exclusive View

July CPI confirms a picture of modest headline inflation rebound with contained core pressures. Market odds for a September hike have fallen from roughly 50% pre‑CPI prints. Sharp divergence has emerged across AI‑linked names: Nebius surged 34% after a 454% revenue jump, while Cerebras tumbled 17% in after‑hours trading on disappointing hardware sales. Investors are increasingly separating genuine AI‑exposure plays from speculative‑themed stocks. The diplomatic deadlock keeps the Hormuz geopolitical premium anchored at USD 5‑10 per barrel.

II. Overnight Market Performance

‑‑ US Equities: S&P 500 +0.26% at 7748.50; Nasdaq +0.54% at 26588.49; Dow Jones ‑0.04% at 53770.27.

‑‑ European Equities: STOXX 600 ‑0.16% at 659.48. DAX ‑0.23%, CAC 40 ‑0.46%, FTSE 100 ‑0.10%.

‑‑ Fixed Income: 10‑year US Treasury yield flat at 4.686%. 2‑year yield ‑1.9bps to 4.199%. 30‑year yield +1.5bps to 5.2499%.

‑‑ Commodities: Spot gold +0.86% to USD 4408.84/oz; Silver +1.02% to USD 65.322/oz.

‑‑ FX: DXY +0.17% at 99.98; EUR/USD ‑0.14% at 1.1524; USD/JPY ‑0.09% at 159.41.

‑‑ Crypto: BTC ‑0.21%; ETH ‑0.07% at USD 1880.90.

III. Macro News

1. 🕊️ US‑Iran talks deadlocked, both sides accuse each other of treaty violations

Sources note persistent major rifts over a permanent Gulf‑war settlement, with no progress toward reviving June’s interim accord. Trump publicly claimed full US control over the Strait of Hormuz.

Insight: Diplomatic gridlock will sustain oil’s geopolitical risk premium. Trump’s “full‑control” rhetoric serves as pressure leverage against Iran; declaratory statements do not equal restored open‑water transit.

2. 📊 Modest July CPI cools September‑hike probabilities

Headline CPI rose 0.1% MoM / 3.4% YoY; core CPI printed 2.6% YoY, matching consensus. Falling gasoline prices acted as the primary drag, while shelter and auto‑insurance costs retained sticky core‑service inflation pressures.

Insight: In‑line readings give the Fed scope to hold rates steady. Crude stabilising within USD 83‑89 keeps inflation‑rebound risks alive, yet a September hike is no longer the base‑case scenario.

3. 📈 IEA: Global oil supply set to drop by 4.3 mb/d this year, widening supply‑demand gap

Middle‑east hostilities are disrupting supply flows and widening the global oil‑market imbalance.

Insight: IEA and OPEC forecasts diverge sharply. IEA highlights expanding supply shortfalls (bullish); OPEC has downgraded demand projections (bearish). Oil direction hinges on actual shipping conditions through the Strait of Hormuz.

IV. Corporate News

1. ☁️ Nebius Q2 revenue surges 454%, AI‑cloud sales jump 514%; stock soars 34%

Formerly Yandex‑backed cloud platform emerges as a dark horse within AI‑compute leasing. Strong results from both CoreWeave and Nebius validate accelerating demand for AI‑cloud infrastructure.

2. 💾 Cerebras hardware revenue misses estimates; after‑hours share price drops 17%

Its bid to compete against Nvidia faces demand‑side volatility. Market tolerance for non‑mainstream AI‑chip players is shrinking.

3. 🚀 Musk: AI will represent 99% of SpaceX’s value in five years; AI victory is mandatory

SpaceX unveiled Grok 4.6 agent‑model, benchmarking above GPT‑5.6 and Fable 5 at half the rival price tag. Musk positions AI at the heart of SpaceX’s long‑term value proposition.

V. Today’s Focus

· 📊 US July PPI: Following soft‑landing CPI, PPI will gauge whether inflation pressures are also contained across production‑side channels.

· 📊 US Weekly Initial Jobless Claims: Labour‑market resilience check.

· 🇬🇧 UK Q2 GDP: First major GDP print under PM Burnham, will steer sterling price action.

· 📊 US 13F Filings Release: Q2 institutional positioning updates; investors will track Berkshire, Bessent funds and hedge‑fund rotation into / out of AI‑tech names.