US equities rally as June inflation eases to 3.5 per cent
The S&P 500, Dow Jones and Nasdaq 100 posted gains on 14 July 2026 as US consumer prices cooled faster than expected, while major lenders reported robust second-quarter results.
US equity markets advanced on 14 July 2026, driven by a US Consumer Price Index (CPI) report showing June inflation eased to 3.5 per cent year-on-year, beating the consensus expectation of 3.8 per cent. The S&P 500 Index rose 0.30 per cent, the Dow Jones Industrial Average gained 0.60 per cent, and the Nasdaq 100 Index climbed 0.97 per cent. The rally was supported by a decline in the 10-year Treasury note yield, which fell 4 basis points to 4.58 per cent.
The softer inflation data contributed to a more favourable environment for risk assets, with September E-mini S&P futures up 0.28 per cent and September E-mini Nasdaq futures up 0.92 per cent. Bond yields fell as investors digested the June CPI figures, which also showed core CPI easing to 2.6 per cent from 2.9 per cent in May, surpassing expectations of 2.8 per cent.
Sector performance was mixed, with US bank stocks advancing after major institutions reported better-than-expected second-quarter earnings. Goldman Sachs, JPMorgan Chase, Bank of America and Citigroup all posted results that exceeded consensus forecasts, boosting investor sentiment in the financial sector. Goldman Sachs led Dow gainers, rising more than 6 per cent after reporting equities and trading revenue of $7.42 billion.
Conversely, software stocks declined, led by a sharp 23 per cent drop in IBM shares after it reported preliminary revenue that missed consensus. Other software names also fell, including Atlassian and Workday, which dropped more than 6 per cent, while ServiceNow and Adobe Systems declined by more than 5 per cent and 4 per cent respectively.
Semiconductor and cybersecurity stocks climbed, recovering some of Monday's losses. The iShares Semiconductor ETF rose more than 3 per cent, with chipmakers such as Advanced Micro Devices and Micron Technology gaining more than 4 per cent. Cybersecurity firms also saw gains, with CrowdStrike and Okta rising more than 6 per cent. Meanwhile, WTI crude oil prices rose more than 2 per cent to a one-month high amid geopolitical tensions involving Iran and the Strait of Hormuz.
Federal Reserve Chair Warsh provided supportive comments regarding the economic outlook, stating that the US economy is resilient and growing at a solid pace. He noted that the labour market is broadly stable and nominal wage growth is solid, while emphasising that the Fed has "no tolerance" for persistently high inflation.
