PCE Report Tomorrow: Tesla, Coinbase, D.R. Horton in Focus as Markets Eye Inflation Data

US markets face a crucial inflation test on Wednesday as investors await the July personal consumption expenditures (PCE) report. The Bureau of Economic Analysis will release the data at 8:30 AM ET, with economists expecting core PCE to rise about 0.2% month on month and annual underlying inflation remaining above 3%. Fundstrat's Tom Lee considers PCE 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 its valuation depends heavily on profits investors expect years from now. A hotter core PCE print could push Treasury yields higher, increasing the discount rate applied to those future cash flows. Conversely, softer inflation could revive expectations for easier monetary conditions and boost Tesla's stock, according to Stifel analyst Stephen Gengaro, who maintained a Buy rating with a reduced target of $491 from $508.

Coinbase offers a higher-beta route into the inflation trade because PCE can impact Treasury yields, the dollar, and Federal Reserve policy expectations. These moves often spill over into Bitcoin and other cryptocurrencies, influencing Coinbase through asset prices and trading volumes. Goldman Sachs analyst James Yaro raised Coinbase's target to $196 from $173 on August 25 while maintaining a Buy rating.

D.R. Horton's inflation link is more mechanical, as changes in Fed expectations influence Treasury yields, which feed into mortgage rates. Higher financing costs raise monthly home payments and reduce affordability. RBC Capital analyst Mike Dahl maintained an Underperform rating on D.R. Horton with a target of $125 from $123, citing weaker demand and inflation risks to fiscal 2027 estimates.