Consumer inflation has surged back after a strong quarter of U.S. consumer demand.

As shown in the LPL Chart of the Day, Consumer Inflation Picks Up in July, the core Consumer Price Index (CPI), which excludes food and energy prices, rose 2.2% year over year last month, its fastest pace of growth in six months. Core CPI has climbed 0.3% month over month in June and July, its biggest two-month gain since 2005.

Today’s data could be a relief for investors, as slowing growth in consumer inflation earlier this year sparked concerns of weakening global demand. Core CPI growth dipped as low as 2% year o

Stocks endured significant volatility last week but showed some resilience Wednesday, August 7, when the S&P 500 Index dropped as much as 2% intraday before rallying back late to close slightly positive. Stocks ended the week near flat, putting the S&P 500 about 3% away from its record high.

Trade News

Escalating trade tensions drove the volatility. In response to President Trump’s latest tariff threat, the Chinese central bank allowed its currency (the yuan) to weaken below the psychologically important 7 per dollar level considered a line in the sand. 

Unfortunately, both sides may inflict m

U.S.-China trade tensions have ratcheted up again following President Trump’s decision to level tariffs on the remaining $300 billion of U.S. imports from China. Combine that with China’s decision to let its currency (the yuan) weaken past the 7 per dollar level, and investors may be more concerned than ever that global tensions could drag down the economy and stocks.

From July 26 through August 5’s close, the S&P 500 Index lost 6%. Even though stocks have rebounded the past few days, we remain several percentage points off the highs. While heightened volatility may be here to stay, technical analysis sugges

The Treasury yield curve is plunging further into inversion, the point at which long-term yields fall below short-term yields.

As shown in the LPL Chart of the Day, Yield Curve Plunges Further Into Inversion, points on the yield curve are nearing alarming levels. The spread between the 3-month and 10-year Treasury yields fell to -31 basis points (-0.31%), approaching the -50 basis points (-0.5%) threshold that has been predictive of recession within a year. At the same time, the spread between the 2-year and 10-year yields has dropped to 11 basis points (0.11%), closing in on inverted territory for the first time this cycle.

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