Wall Street's Record Rally Pauses Amid Oil Prices and CPI Concerns

On the 11th local time in the US, the New York stock market took a breather near record highs and closed lower. The S&P 500 dipped 0.3% to 7,728.20, the Dow fell 0.3% to 53,791.85, and the Nasdaq declined 0.6% to 26,445.45.

During the session, attention focused more on oil prices than on the indices. With the Strait of Hormuz blocked amid the Iran war, Brent crude oscillated between $87 and $90 before closing at $88.91, up 1.4% from the previous day, stoking concerns about a renewed inflation surge.

Investors are now eyeing the July Consumer Price Index (CPI), due on the 12th. The market expects the year-over-year increase to ease slightly from 3.5% in June to 3.4%, yet still remain above the Fed’s target. Fed officials are divided on whether to enact an additional rate hike at the September meeting—the first in three years—while derivatives markets are pricing in nearly equal odds of a hold or a hike, underscoring heightened policy uncertainty.

The earnings season itself has been generally positive. Swiss sportswear maker On Holding issued conservative sales guidance, sending its shares plunging over 20%, whereas Aramark and Cardinal Health rallied on stronger-than-expected results. With S&P 500 corporate earnings expected to rise roughly 50% year over year, most see this pullback as a pause to reassess the three key variables—war, oil, and inflation.