CPI went negative. Core hit zero. JPM crushed by $8B. Your summer just flipped

Nathan Reed

— 4 min read
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CPI went negative. Core hit zero. JPM crushed by $8B. Your summer just flipped

TUESDAY MARKET UPDATE

CPI went negative. Banks crushed. Warsh is testifying right now with a soft inflation print in his hand and $86 oil at his back. Everything we've been watching all summer just landed on the same morning.

  • CPI: −0.4% MoM, 3.5% YoY — biggest monthly drop in 6 years; core 0.0%; hike odds collapsing.
  • 🟩 | Banks crushed it — JPM +41% YoY earnings; Goldman +78%; Wells +17%; trading desks feasted on war volatility.
  • 🟥 | Oil at $86 Brent — Iran blockade keeping crude elevated despite CPI decline; the war premium won't quit.

Gold & Macro

NEGATIVE CPI. ZERO CORE. HIKE CASE CRACKED

Gold bars stacked vault spotlight

Headline CPI: −0.4% month-over-month. That's the biggest monthly decline since April 2020. Year-over-year dropped from 4.2% to 3.5%. But the real surprise is core: 0.0% monthly, 2.6% annual — down from 2.9%. Zero. Gasoline fell 9.7%. Energy dropped 5.7%. The war premium in oil is screaming at $86 Brent, but it hasn't reached consumer prices yet. The disinflation the Fed wanted is here — for now.

Gold is surging toward $4,100 as hike odds collapse. July hold probability hit 86%. September hike is repricing lower. But Warsh's prepared testimony says he “will not tolerate persistently elevated inflation”. That's not dovish. It's conditional. He's keeping September alive even as the data argues against it. Oil at $86 is his insurance policy — if Hormuz stays blocked, next month's CPI won't be this friendly.

The question for gold: does the market believe June CPI or July oil? If disinflation holds, gold runs to $4,200+. If oil stays above $80 and next month prints hot, this rally dies fast.

The Trade

BANKS CRUSHED IT. WAR PAID THE BILL

Wall Street bank lobby marble morning

JPMorgan reported $6.14 EPS versus $5.85 expected. Revenue: $58 billion versus $50 billion expected. Goldman posted $20.98 EPS — nearly 50% above the $14.47 consensus. Wells Fargo beat at $2.00 versus $1.72. Bank of America and Citigroup are reporting this morning too. The pattern is clear: trading desks feasted on war volatility. Oil swings, rate uncertainty, currency moves — every disruption became a revenue line for the big banks.

Half our poll predicted banks would miss. They were wrong. War is good for Wall Street's trading desks even when it's bad for everything else. JPMorgan's SpaceX IPO advisory fees, Goldman's M&A revenue from two $10B+ pharma deals, and the sheer volume of oil and rates trading created a perfect quarter. The question is whether this was a one-time windfall or the start of a cycle.

What to watch:

Today: Warsh testimony continues. Wednesday: PPI + retail sales. Thursday: Morgan Stanley earnings. July 29: FOMC decision.

Heat Check

S&P 500 Heatmap — July 14, 2026. Credit: Finviz
S&P 500 Heatmap — July 14, 2026. Credit: Finviz

Nathan’s Take

“CPI went negative. Core hit zero. JPMorgan posted $58 billion in revenue. And Warsh still won't say the word “cut.” One number says disinflation is here. One man says he doesn't believe it yet. Your portfolio is betting on which one blinks first”

Names to Know

JPMORGAN, GOLDMAN, WELLS FARGO

JPMorgan Chase $JPM (▲ EPS +41% YoY) — $6.14 vs $5.85 expected; revenue $58B vs $50B expected; trading desks drove the beat on war-driven volatility.

Goldman Sachs $GS (▲ EPS +78% YoY) — $20.98 vs $14.47 expected; revenue $20.3B; M&A advisory and SpaceX IPO fees crushed it.

Wells Fargo $WFC (▲ EPS +17%) — $2.00 vs $1.72 expected; NII held steady; the post-asset-cap growth story is intact.

Bank of America $BAC (reports today) — expected EPS ~$1.20; NIM trajectory is the key metric; consumer lending trends matter after Nike's warning.

Morgan Stanley $MS (reports Thursday) — closes out bank week; wealth management and trading revenue are the key metrics; the last major bank to set the tone.

For real-time data, I recommend monitoring Finviz.

The Macro Edge

  • Gasoline fell 9.7% in June; energy −5.7% — the biggest driver of the headline CPI decline; but oil is back at $86 on the Iran blockade.
  • Warsh testified: “will not tolerate persistently elevated inflation” — hawkish tone despite soft CPI; keeping September alive as an option.
  • Brent at $86.73 — up 15-18% in July alone; Iran blockade keeping crude elevated; if oil stays here, July CPI will be hot again.
  • CME FedWatch: July hold at 86% — up from 58% yesterday; September hike odds falling rapidly; one print rewrote the rate path.
  • This week: PPI + retail sales (Wed), Morgan Stanley earnings (Thu), FOMC July 29.

CPI cooled. Banks crushed. Warsh won't blink. The summer just got interesting. PPI tomorrow.

Nathan Reed | Profits & Insights

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