SPY - S&P 500 To Plunge More Than 20% Near Term? Top Economist Breaks Down Broader Market Vs. Small-Cap Divergence After June CPI Report | Benzinga
The stock market had a “buy-the-rumor, sell-the-news” move on Thursday after a tamer inflation data sent the major averages sharply lower, with the sell-off spearheaded by mega-caps and big techs.
What Happened: The Bureau of Labor Statistics’ June consumer price inflation report showed that the month-over-month rate of the headline inflation came in at a negative 0.1%, the first drop in more than four years, defying expectations of a 0.1% rise. The year-over-year rate cooled off to 3% from 3.3% in May, below the 3.1% rate forecast by economists.
The core monthly and annual rates slowed to 0.1% and 3.3%, respectively, as opposed to expectations of 0.2% and 3.4%.
The slowdown was facilitated by a slower rate of increase in shelter costs and prices of autos and gasoline falling in June.
Commenting on the report, economist David Rosenberg said, “For a change, the stock market doesn't like a stellar CPI report. Maybe it's realizing the data aren't exactly all that constructive for corporate pricing power ...