Investors were blindsided by hot July PPI inflation reading, but stocks mostly shrugged it off — or did they?
1. Falling bond yields sparked a market rotation towards small caps and home builders. 2. Producer-price index increased by 0.9%, the fastest in three years. 3. Small caps and home builders faced declines amidst high inflation expectations. 4. Megacap stocks like Amazon supported major indexes despite overall market weakness. 5. Investors unsure how inflation will impact the market going forward.