Market Currents: Daily Briefing
Quantitative analysis of current market conditions
Market Snapshot
The Top Line
Stocks dipped slightly Thursday as chip and AI-related companies sold off on spending worries, even though most other sectors gained. The big question ahead: will the Fed cut rates soon, or hold steady into next year?
Inflation
Prices actually cooled last month — the Consumer Price Index, which tracks what you pay for everyday goods and services, showed prices came down 0.4% from May to June, mostly because gas got cheaper. Compared to a year ago, prices are still up 3.5%, a bit less than expected. The Federal Reserve — the central bank that sets interest rates affecting your mortgage, car loan, and savings account — isn't ready to declare victory yet. It expects prices to run a bit hotter later this year, so don't expect a rate cut anytime soon.
Key Takeaway
Prices cooled a bit in June, but the Fed still isn't planning to cut rates until at least 2027.
Risk and Positioning
Market conditions turned a little stormier Thursday, though nowhere near a full squall. The market's fear gauge, known as the VIX, jumped nearly 7% — a sign of nervousness — but it's still sitting at a fairly calm level overall. The turbulence was concentrated in chip and tech stocks, not the whole market, and investors weren't rushing toward safety the way they typically do during real scares: gold actually fell, and safe government bonds barely moved.
Key Takeaway
Thursday's jitters were about tech stocks specifically, not a broader market scare.
Sector and Cross-Asset Analysis
Everyday goods companies, healthcare and pharmaceutical companies, and real estate investment trusts were the day's winners, each gaining about 2%, partly thanks to strong earnings from health insurer UnitedHealth. Tech companies (XLK) were the lone weak spot, dragged down by chipmakers after Taiwan Semiconductor said it plans to spend far more building AI infrastructure than expected, worrying investors about payoff timing. Oil and gold prices also slipped.
Key Takeaway
Money moved out of tech stocks and into steadier, everyday-business sectors on Thursday.
Economic Data & Events
- 6:30 AM MT — Housing Starts (how many new homes builders began building) — Moderate Impact
- 7:15 AM MT — Industrial Production (how much U.S. factories and mines produced) — Moderate Impact
Today's reports are on the lighter side, covering home construction and factory output — useful gauges of economic health but not market-moving blockbusters. The next big date to watch is July 28-29, when the Fed meets to decide on interest rates; most traders expect them to hold steady. After that, the next inflation report doesn't arrive until August 12.
Key Takeaway
The next major event is the Fed's July 28-29 meeting, where a rate cut is unlikely.
What We're Watching
When Will the Fed Cut Rates?
The Fed isn't expected to cut interest rates until 2027 at the earliest, even after a cooler inflation report.
What Bond Yields Mean for Your Loans
Bond yields, which influence mortgage and loan rates, have stayed flat, ahead of August's inflation report.
Tech Stocks Face an AI Spending Reality Check
Tech stocks are under pressure as investors question whether massive AI spending will pay off soon enough.
Could the Chip Selloff Spread?
If the AI spending slowdown spreads beyond chip stocks, it could unsettle the broader market.
The Bottom Line
Expect a bit of choppiness in tech and chip stocks while investors digest big AI spending plans, even as most other parts of the market stay calm. Steadier sectors like healthcare and everyday goods companies look better positioned for now.
This briefing was drafted with the assistance of artificial intelligence tools. All content has been reviewed and approved by Thomas MacPherson, Investment Adviser Representative (Series 65) and Chief Compliance Officer, River Rose Financial, LLC, prior to publication. AI systems may produce errors, omissions, or outdated information; readers should independently verify data.
Market Currents does not constitute an investment advisory relationship, does not create a fiduciary duty, and does not include personalized investment advice. Subscribers should not rely on Market Currents as a substitute for individualized financial advice. This briefing is for informational purposes only. Market conditions change rapidly; all data and projections are subject to revision without notice.
River Rose Financial, LLC is a registered investment adviser with the State of Colorado. Registration does not imply a certain level of skill or training. Past performance is not indicative of future results. All investment strategies involve risk, including possible loss of principal.
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