Today's market landed on a tidy conclusion — "inflation is cooling" — but the signals underneath weren't nearly that clean. Headline PPI clearly softened, but core PPI nearly quadrupling in a single month isn't a number to wave away. The reason markets treated it as noise and ran to a fresh record anyway comes down to two allies: falling oil prices and falling Treasury yields. The problem is that one of those allies, oil, can reverse at any moment. Cisco and Applied Materials both beating estimates and still selling off should be read in the same light — in a market where good news is already priced in, what matters isn't how well a company did, but how much better than expected it did. I'd expect this tense balance to hold until the August 26 PCE report and Jackson Hole force a resolution one way or the other.
📊 Top Movers
🧭 Sector Performance
🇰🇷 Korean Investor Perspective
The Korean won weakened against the dollar today, with USD/KRW closing at 1,417.81 — up 5.63 won from the prior close — reversing the past week's decline. For Korean retail investors ("seohak-gaemi") without currency hedges, today layers FX gains on top of the US equity rally. One development worth flagging: Micron (MU) surged 4.23%, edging back toward a trillion-dollar market cap. Micron captured 25% of the global DRAM market in Q2, nearly matching SK Hynix's 26% share — a data point that carries both earnings implications and competitive-pressure implications for Korean semiconductor investors. Given how closely Samsung Electronics and SK Hynix track the memory cycle, Micron's ongoing string of price-target hikes is worth watching as a leading indicator.
📊 Market Overview
US stocks closed higher across the board on Thursday, August 13. The S&P 500 gained 50.49 points (+0.65%) to close at 7,798.99, breaking above 7,800 for the first time ever and setting a fresh closing record. The Nasdaq Composite rose 214.54 points (+0.81%) to 26,803.03, while the Dow Jones Industrial Average added a more modest 69.72 points (+0.13%) to 53,839.99. The small-cap Russell 2000 also hit a fresh record near 3,067.
The biggest driver of the day's gains was the July Producer Price Index (PPI), released this morning. Headline PPI was flat month-over-month (below the +0.2% consensus), and the year-over-year rate cooled sharply to 4.7% from 5.5% the prior month — meaningfully easing worries about a September rate hike from the Fed. That said, core PPI (excluding food, energy, and trade services) rose 0.4% month-over-month, nearly four times June's +0.1% pace, suggesting the "all clear" on inflation may be premature. A sharp drop in oil prices (WTI -2.5%) reinforced the disinflation narrative, and buying concentrated in tech and AI-related names pushed the indexes higher.
The CNN Fear & Greed Index held at 62 (Greed), reflecting continued risk appetite. With today's PPI confirming yesterday's CPI-driven rally, markets extended the "cooling inflation → fading rate-hike fears → risk-on" pattern for a second straight session.
🔑 Key Issues
1. July PPI: Headline cools, but core accelerates
The Bureau of Labor Statistics' July PPI report showed final demand prices unchanged month-over-month, below the 0.2% consensus estimate. Final demand services prices rose 0.2% and construction prices jumped 2.2%, but these were offset by a 0.7% drop in final demand goods prices — driven largely by a sharp decline in gasoline prices. Year-over-year, PPI rose 4.7%, the lowest reading since March. The more notable development was core PPI (excluding food, energy, and trade services), which rose 0.4% in July after just 0.1% in June — nearly a fourfold acceleration. Strength in services, led by portfolio management fees, drove the core reading higher, tempering any conclusion that inflation has been fully tamed.
2. Wall Street diverges sharply on the Fed's September decision
Today's data shifted market pricing further toward a Fed hold at the September FOMC meeting. David Kelly, Chief Global Strategist at J.P. Morgan Asset Management, said the Fed "absolutely should stay on hold, and I actually think they will," adding that the US essentially has "Teflon inflation" that "won't stick." Goldman Sachs, by contrast, projects an additional 50 basis points of rate cuts in 2026, bringing the policy rate to 3.25%. Bank of America remains the hawkish outlier, still forecasting three separate 25-basis-point hikes across September, October, and December — a total of 75 basis points — leaving Wall Street's rate outlook more divided than at almost any point this year.
3. AI infrastructure names extend their run
Wednesday's 15-27% surges in CoreWeave, Nebius, and Supermicro on strong earnings carried into Thursday, reinforcing conviction in the AI infrastructure investment cycle. Memory bellwether Micron (MU) closed up 4.23% at $949.83, as tightening DRAM supply prompted major firms including Deutsche Bank to push price targets above $1,000. On the software side, Adobe (+4.54%) and Salesforce (+4.16%) both rallied, broadening tech-sector strength beyond chips.
4. Earnings season: "beat and still get sold" becomes a pattern
Cisco Systems (CSCO) reported fiscal Q4 results that beat across the board — adjusted EPS of $1.22 versus $1.17 expected, and revenue of $17.3 billion versus $16.82 billion expected — and guided FY2027 revenue to $72.2-73.4 billion, well above the $68.69 billion consensus. Even so, margin concerns and profit-taking on already-priced-in good news sent the stock down more than 4% after hours, with losses extending into the next regular session. Several brokers nonetheless raised price targets after the print, including Morgan Stanley (to $135 from $130, Overweight) and Wells Fargo (to $150). Applied Materials (AMAT) beat on EPS ($3.50 versus $3.45 expected) but missed slightly on revenue ($9.115 billion versus $9.176 billion expected), falling 3.89% after hours. Workday (WDAY), meanwhile, surged 21% on a Reuters report of potential buyout talks with Silver Lake — a day of sharply divergent single-stock reactions.
5. Falling oil prices reinforce the disinflation narrative
WTI crude fell 2.5% to $81.19 a barrel, while Brent slid more than 2% to $87.07. The oil decline was both a direct driver of July's PPI goods-price drop and a factor markets read as supportive of further headline disinflation ahead.
📊 Sector Performance
| Sector | Change | Key Driver |
|---|---|---|
| Communication Services (XLC) | +2.07% | Meta (+2.78%) strength, continued earnings optimism |
| Real Estate (XLRE) | +1.42% | Re-rating on falling Treasury yields (-0.88%) |
| Consumer Staples (XLP) | +1.08% | Defensive rotation |
| Technology (XLK) | +1.01% | Micron, Adobe, Salesforce lead semis and software |
| Financials (XLF) | +0.59% | Modest gains despite lower rates, earnings season in focus |
| Consumer Discretionary (XLY) | +0.48% | Led by Tesla (+3.80%) |
| Utilities (XLU) | +0.46% | Benefiting from lower rates |
| Energy (XLE) | +0.05% | Held roughly flat despite the oil price drop |
| Health Care (XLV) | -0.04% | Weighed down by UnitedHealth (-1.61%) |
| Industrials (XLI) | -0.05% | Softness in Boeing, GE and other names |
| Materials (XLB) | -0.51% | Worst-performing sector on falling oil and commodity prices |
🌍 Global Markets
- Europe STOXX 600: 659.24 (-0.04%) — Europe held back while US equities rallied
- US Dollar Index (DXY): 99.96 (-0.05%) — Slightly softer amid falling rates
- 10-Year US Treasury Yield: 4.64% (-0.88%) — Renewed safe-haven demand on soft PPI
- WTI Crude: $81.19/barrel (-2.50%) — Easing supply concerns, lower inflation pressure
- Gold: $4,407.20/oz (-0.04%) — Roughly flat despite falling rates
🚀 SPCX (SpaceX) Update
SPCX closed down 3.33% at $141.29 on Thursday. The pullback follows roughly a 40% surge over the prior two weeks, driven by the Cursor acquisition, new AI product launches, and 92% year-over-year Q2 revenue growth to $7.8 billion — so today's dip looks more like profit-taking after a sharp run-up than a reaction to any specific negative catalyst. SpaceX's Falcon 9/Heavy rockets continue to carry over 90% of global orbital mass, with the company on track for its 700th launch by September, underscoring solid underlying business momentum. Twenty-eight Wall Street analysts maintain buy ratings with an average price target around $232, suggesting many still see room for further upside even after the recent rally.
⚠️ Investor Caution
With the S&P 500 crossing 7,800 for the first time, valuation concerns are becoming harder to ignore. August and September are seasonally volatile months for equities, and today's pattern — where Cisco and Applied Materials both beat estimates yet sold off on guidance and margin concerns — suggests a market where a great deal of good news is already priced in. The nearly fourfold jump in core PPI in a single month is also a reminder that reacceleration risk hasn't fully disappeared. Volatility could pick up around each data release between now and the next major inflation readings — July PCE on August 26 and the Jackson Hole symposium on August 28 — making this a reasonable moment to revisit leverage and concentration in high-valuation, non-dividend growth names.
👁 Tomorrow's Watch Points
- July retail sales (8/14, 8:30 AM ET): Headline sales expected up 0.3% month-over-month (versus +0.2% prior); ex-auto sales expected up 0.2% (versus -0.2% prior). This is a key consumer-spending read the Fed will have in hand two weeks ahead of Jackson Hole, and a large beat or miss could shake up rate expectations again.
- University of Michigan Consumer Sentiment (August preliminary, 10:00 AM ET): Watch the inflation-expectations component in particular — a key gauge of how much the core PPI surprise has moved consumer psychology.
- Whether the S&P 500 holds above 7,800: Coming right off a fresh record, some profit-taking-driven pullback should be expected; 7,750 is being cited as an initial support level.
- Cisco and Applied Materials aftermath: Watch AMAT's regular-session reaction to its 3.89% after-hours decline, and whether Cisco's continued slide despite the beat spills over into semiconductor equipment and networking names broadly.
- Whether AI infrastructure momentum continues: Whether CoreWeave, Nebius, and Supermicro's rally extends further or shifts into a profit-taking phase could set the tone for tech more broadly.
💡 Upcoming Events to Watch
- 2026-08-14: July retail sales, University of Michigan Consumer Sentiment (preliminary)
- 2026-08-26: July PCE price index (the Fed's preferred inflation gauge)
- 2026-08-28: Jackson Hole Economic Symposium, Fed Chair keynote address
- Mid-September 2026: FOMC meeting — the final word on hold versus hike
📚 Sources
- CNBC — S&P 500 closes at a new record, buoyed by cooler-than-expected inflation data and falling oil prices
- Yahoo Finance — Stock market today: S&P 500 and Nasdaq gain on soft inflation data, Dow dips
- U.S. Bureau of Labor Statistics — Producer Price Index News Release, July 2026
- TheStreet — Stock Market Today (Aug. 13, 2026): S&P 500 sets new record, clearing 7,800 for the first time
- TradingView/StockTwits — JPMorgan's David Kelly Expects Fed To Keep Interest Rates Unchanged
- CNBC — Bank of America sees 3 Fed hikes in 2026, inflation 'unambiguously worse'
- 24/7 Wall St. — Cisco Drops 7% on Gross Margin Fears: Five Firms Raise CSCO Price Target Anyway
- FinancialContent/StockStory — Why Cisco (CSCO) Stock Is Down Today
- Quiver Quantitative — Applied Materials ($AMAT) Releases Q3 2026 Earnings
- 24/7 Wall St. — DRAM Movers: These Memory/Storage ETFs Are Soaring as Sandisk, Micron Rally
- Barchart — This Analyst Just Gave Micron Stock a $1,500 Price Target. Here's Why
- Investing.com — SpaceX (SPCX) Stock Quote
- CNBC — SpaceX stock rebounds, closing above $135 IPO price for first time in weeks
- FinanceCalendar — US Retail Sales August 2026: Date, Time & What to Expect
- Benzinga — Nasdaq Gains Over 100 Points Following Inflation Data: Investor Sentiment Edges Higher, Fear Index Remains in Greed Zone