Soft CPI Data Crushes Inflation Fears – And Sets Stocks Up for a Summer Surge

After a volatile spring, the market has staged a sharp rally, and last week's Consumer Price Index (CPI) report signals an even brighter outlook. Carol Dewey breaks down why April's soft CPI data (0.2% month-over-month for both headline and core) wasn't just good news, but a "death knell" for fears of tariff-driven reinflation. Despite initial panic, data shows no tariff-fueled inflation, thanks to rollbacks, exemptions, and new trade deals (like the U.S.-U.K. agreement and U.S.-China truce) slashing average effective U.S. tariff rates from 30% to a far more manageable 13%.

With inflation easing, tariffs falling, the Fed poised to cut rates, strong consumer spending, and solid corporate earnings (especially in AI leaders like Nvidia, AMD, and Palantir), the macro mosaic paints a picture of a "no-brainer bull market." Carol highlights historical precedents of similar sharp S&P 500 rallies that marked the start of major bull markets. The path is clear for a summer surge – it's time to lean in!

🔍 What You’ll Learn in This Episode:

✔️ Analysis of the surprisingly soft April CPI report (headline and core CPI at 0.2% month-over-month), dispelling tariff-driven inflation fears.

✔️ How a series of tariff rollbacks, exemptions, and trade deals (including a U.S.-U.K. agreement and U.S.-China truce) have significantly reduced the average effective U.S. tariff rate.

✔️ The confluence of bullish macro factors: stable-to-lower inflation, falling tariffs, impending Fed rate cuts, robust consumer spending, and strong corporate earnings.

✔️ The powerful performance of AI stocks (Nvidia, AMD, Palantir) amidst these tailwinds.

✔️ Historical context for the S&P 500's recent sharp rally, suggesting the beginning of a major bull market.

📘 Mentioned in This Episode:

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