PCE Report Looms Large Over US Markets

The US inflation test is just hours away as investors wait for July's personal consumption expenditures report. The Bureau of Economic Analysis will release the data at 8:30 AM ET, and economists expect core PCE to rise about 0.2% month on month, with annual underlying inflation remaining above 3%. Fundstrat's Tom Lee considers this one of three major hurdles for markets this week, alongside Nvidia earnings and Fed Chair Kevin Warsh's Jackson Hole speech.

Tesla is exposed to bond yields because much of its valuation depends on profits investors expect years from now. A hotter core PCE print could push Treasury yields higher, raising the discount rate applied to those future cash flows. Stifel analyst Stephen Gengaro maintained a Buy rating this month while cutting his target to $491 from $508, citing strong progress on FSD and Robotaxi.

Coinbase stock offers a higher-beta route into the inflation trade because PCE can move Treasury yields, the dollar, and expectations for Federal Reserve policy. A softer inflation print could weaken yields and the dollar, potentially giving Bitcoin another attempt at recent highs and supporting Coinbase activity.