Producer Prices, Chips Help Lift Stocks Early

Published as of: July 15, 2026, 9:25 a.m. ET

(Wednesday market open) Earnings keep impressing and major indexes inched up again early, after solid results from Morgan Stanley (MS) and ASML (ASML). Data-wise, today's June Producer Price Index (PPI) of -0.3% and core PPI excluding food and energy of 0.2% both undercut consensus.

"We continue to expect the Fed to take a wait and see approach, and these reports buy the committee some time," said Collin Martin, head of fixed income research and strategy at the Schwab Center for Financial Research (SCFR). Chances of a rate hike this month fell to just 11% after the data, according to the CME FedWatch Tool.

Stocks rebounded Tuesday, lifted by chips and Consumer Price Index (CPI). The Nasdaq sizzled as chipmaker SK Hynix (SKHY) jumped 27%, but the Dow Jones Industrial Average got burned by IBM (IBM), down 25% in its worst day ever after preannouncing disappointing results. There's little time to take a breath after yesterday's gaggle of bank earnings and CPI. Federal Reserve Chairman Kevin Warsh is on deck for more testimony, this time in the Senate. Crude rose again this morning to almost $80 per barrel after another night of attacks and threats from both sides in the Persian Gulf.

1. PPI fell more than expected, hinting at slowing trend: June's 0.3% drop in PPI compared with the 0.1% Briefing.com consensus, while core growth of 0.2% was below the 0.4% expected. "Falling energy prices were a key driver of the monthly drop in headline PPI, but a look under hood suggests the underlying trend could be slowing," Martin said. Though the numbers looked mostly positive, it's worth noting that the 0.2% core figure was up from a revised 0.1% core in May. Core is the more important figure to watch long-term since it's shielded from energy price swings, and rising prices there—at the wholesale level—could ultimately narrow margins for businesses or force them to raise prices paid by consumers. Some components of PPI also factor into the Personal Consumption Expenditures (PCE) price index, the Fed's favored reading on inflation due later this month, and a few of those rose in June. Drilling in, wholesale goods prices fell in June while services climbed, with gasoline contributing most to the drop in goods.
    
2. Look for how wealth, inflation affect retail sales: Tomorrow's 8:30 a.m. ET June retail sales report could provide color on more recent consumer trends, with the stock market's "wealth effect" possibly driving spending among the upper echelon of earners. "Economic activity is expanding at a solid pace," Warsh said yesterday in his remarks to the House, adding that household consumption growth is "moderate." With retail sales, it's important to check beyond the headline for the closely watched control group, which excludes items like gas station sales and factors into the government's gross domestic product (GDP) figures. For the headline figures, Briefing.com consensus is 0.3%, or 0.1% excluding automobiles. Retail sales don't adjust for inflation, so large growth might reflect higher prices to some extent, not rising demand. Before retail sales, the Fed releases its Beige Book examining regional activity at 2 p.m. ET. In June, the Fed cited inflation's strain on both middle- and lower-income households, and said employment showed little or no change. Inflation flagged a bit in June, so observations from the Fed may reflect that. New York Fed President John Williams said today there are "encouraging reasons to expect that inflation has peaked" and should "edge down" in coming quarters.
    
3. Volatile chip sector revenues continue, though higher prices lurk: ASML today and Taiwan Semiconductor Manufacturing (TSM) tomorrow keep chips front and center. Earlier this week, TSM reported a 36% year-over-year revenue gain in the second quarter, accelerating in June. This suggests demand remains very strong, though chip buyers face higher prices due in part to a shortage of memory chips that some analysts think could stretch past 2030. Last week, Morgan Stanley warned that chip buyers could turn to cheaper proprietary AI chips, suggesting chipmakers have limited pricing power as competition mounts, Bloomberg reported. The sector remains volatile. SK Hynix is case in point, climbing 27% yesterday after falling sharply Monday. Keep in mind that daily fluctuations in chips are the highest since the late 1990's. For investors wondering how to differentiate SK Hynix and competitor Micron (MU) fundamentally, both are making long-term supply agreements with customers, Barron's reported, which could support margins. SK Hynix is seen growing revenue and earnings at a slightly higher pace than Micron this year, according to FactSet, and trades at a lower multiple.

• Morgan Stanley climbed almost 2% in early trading, as earnings and revenue easily surpassed consensus thanks to a 69% surge in equity trading. This rounded out a big bank earnings season in which all of the major Wall Street banks blew past expectations, Bloomberg noted.
   
• ASML climbed more than 3% ahead of the open. Quarterly results exceeded consensus and the company provided better-than-expected revenue and margin guidance for the third quarter and full year. ASML, which builds chipmaking equipment, said its order intake was "extremely strong" in the first half and that AI investment is "further strengthening the semiconductor industry's growth outlook."
   
• PayPal (PYPL) surged almost 20% in early trading. Reuters reported that payments company Stripe and private equity firm Advent International have made a joint offering to buy PYPL for $60.50 per share, putting the value at more than $53 billion. The companies declined to respond to Reuters' inquiries.
   
• BlackRock (BLK) posted early 4% gains as earnings topped Wall Street's expectations. Assets under management climbed 22% to $15.34 trillion in the second quarter and the company said strong fundamentals predominate.
   
• Software stocks, which backtracked Monday after IBM's (IBM) bearish earnings pre-announcement reignited concerns that spending was turning toward chips and away from software, moved slightly higher this morning and IBM edged up 1%. Chips edged higher on ASML's news.
   
• Cyber security stocks Palo Alto Networks (PANW) and Crowdstrike (CRWD) climbed sharply Tuesday after IBM's CEO said businesses are focused on cyber security spending to counter AI-induced threats, and passing up major deals in the meantime, CNBC reported.
   
• Pentair (PNR) dove 22% after the water treatment equipment maker issued a preview of earnings that missed consensus. The company blamed its performance on a decline in pool sales and worsening business conditions.
   
• HCA Healthcare (HCA) fell almost 7% Tuesday after reducing its 2026 earnings guidance, citing an unfavorable payer mix shift tied to health insurance exchange coverage losses, Briefing.com reported.
   
• Automotive firm Lucid (LCID) toppled 41% at midday Tuesday, but the company called "completely false" a report in a trade publication that it's considering filing for bankruptcy or going private. Shares then recovered somewhat but still finished down 16%.
   
• China's second quarter GDP was 4.3%, the lowest in more than three years and below the official annual target of 4.5% to 5%.

With airline and railroad stocks reporting this week and next, the Dow Jones Transportation Average ($DJT—candlesticks) is a leading gainer on Wall Street year to date, outpacing the Nasdaq-100® (NDX—blue line) and the S&P 500 Index (SPX—purple line). Solid demand from consumers for air travel and businesses for cargo on trucks and trains appear to be supportive, despite high oil prices.

Check out the investors' calendar for a summary of the top economic events and earnings reports on tap this week.

July 16: Expected earnings from Taiwan Semiconductor Manufacturing (TSM), GE Aerospace (GE), UnitedHealth Group (UNH), Abbott Laboratories (ABT), US Bancorp (USB), Netflix (NFLX), and Intuitive Surgical (ISRG).
July 17:  June housing starts, June building permits, June industrial production, July preliminary University of Michigan consumer sentiment, and expected earnings from Travelers (TRV), Truist Financial (TFC), and Fifth Third Bancorp (FITB).
July 20: No major earnings or data expected.
July 21: Expected earnings from Novartis AG (NVS), Danaher (DHR), Marsh & McLennan (MRSH), 3M (MMM), Northrop Grumman (NOC), General Motors (GM), MSCI (MSCI), D.R. Horton (DHI), Halliburton (HAL), Chubb (CB), and Capital One (COF).
July 22: Expected earnings from GE Vernova (GEV), Philip Morris (PM), AT&T (T), CME Group (CME), Alphabet (GOOGL), Tesla (TSLA), Texas Instruments (TXN), IBM (IBM), ServiceNow (NOW), and CSX (CSX).