Inflation Fears Weigh on Market as Analysts Upgrade Key Stocks

The July consumer price index (CPI) and producer price index (PPI) will be released at 8:30 AM EDT, sparking market attention. Economists forecast a 0.1% month-over-month increase in headline CPI and 3.4% year-over-year growth, with core CPI expected to rise 0.2% month-over-month and 2.5% year-over-year.

A hot inflation reading could lead to heavy selling, while below-expected numbers may prompt buying of corporate and government debt. Treasury yields are modestly lower across the curve, but rates have surged in recent weeks.

The energy complex saw higher prices due to slowed traffic in the Strait of Hormuz, with Brent Crude reaching $89.13 and West Texas Intermediate at $83.36. Gold closed down 0.49% at $4,366, while Bitcoin slipped 1.2% towards the $63,500-$64,000 range.

Wall Street analysts upgraded several stocks, including Hilton Worldwide, Intuitive Surgical, Merck & Co., Okta, and Genmab. The Gap was downgraded to Hold from Buy at Jefferies, while Tencent Music Entertainment Group was downgraded to Hold from Buy at China Renaissance.