Mild Macro Data Sets up AI Tech Earnings and a Busy August Corporate Event Stretch

It was the first in what turned out to be a somewhat Goldilocks set of June reports. The CPI on its own flipped the Fed rate hike odds to the likelihood of a hold. The following morning, PPI data confirmed a sanguine inflation trend. Wholesale prices dipped 0.3%, aided by a 6.4% energy price retreat, helping to push goods costs lower as the first half drew to a close.

Services inflation was still apparent, however, and year-over-year PPI remained elevated at 5.5%.

Then came Retail Sales from the U.S. Census Bureau on Thursday, July 16. This macro reading was not far from consensus, with headline spending edging up 0.2% in June, along with a stronger revised 1.0% increase in May.

On a one-year basis, retail outlays were up 6.7%, well above the prevailing inflation rate, suggesting that consumers kept shopping online, spending on travel, and gearing up around the New York Knicks' NBA Finals victory and the 2026 FIFA World Cup.

AI Spending Faces a Reality Check​

What does it all mean for investors? Well, the economy keeps chugging along, in part because of the AI buildout. But a "spend at all costs" mindset has shifted to expense control on the part of major corporations, with Uber (UBER) among the notable firms to tap the brakes on model usage. Indeed, so-called "token-maxing" has given way to a more throttled mindset, just as the Q2 earnings season kicks into high gear. We’ll know more when the major AI hyperscalers and other mega-cap tech companies report quarterly results later this month.​

In the rearview, IBM’s preliminary earnings report last week stunned the Street, sending shares spiraling lower for their worst day since Big Blue’s modern-era IPO in 1962. It wasn’t exactly the kind of start to the reporting period that investors hoped for. As normally scheduled revenue and profit numbers hit the tape, FactSet notes that companies missing on actual earnings have seen their stock prices get clobbered. John Butters confirmed that firms with negative surprises have seen an average stock price decline of 9% (covering the period from two days before the release through two days after). It’s a historically large percentage, while beats are barely being rewarded.​

As for the key dates, following GOOGL and TSLA this week, SK Hynix, Samsung, Meta, Microsoft, Apple, and Amazon put out quarterly earnings next week. Also be on the lookout for mega-cap tech volatility in early August during the Black Hat 2026 conference (August 1-6) and the Future of Memory and Storage Conference (August 4-6). SpaceX reports Tuesday, August 4 AMC. Later in the month, the Hot Chip 2026 Conference (August 23-25) has a slew of AI leaders on the speaking docket, right before NVIDIA’s Q2 earnings hit on Wednesday, August 26 AMC.

The Fed Goes Quiet​

So, investors got what they were hoping for in terms of the key June macro data. Yes, the payrolls report was soft, but weekly jobless claims are very low for this time of year, and other high-frequency indicators point to a healthy and stable labor market. Fed Chair Kevin Warsh said as much during his semiannual testimony before Congress as CPI and PPI rolled in last week.​

Pressed for his views on what the FOMC may do regarding interest rate policy and the Fed’s balance sheet, Warsh was indirect. Barely two months into his tenure, wishy-washy Warsh may be apropos. That’s not an indictment, either, as Powell’s successor seeks to tone down Fed speak, restoring a more Greenspan-era communication policy.

Yes, it’s comforting to look back on the 1990s with rose-tinted glasses, but the truth is that today’s monetary policy construct is simply different. Modern Fed members feel motivated to voice opinions, and if Warsh remains quiet, other voting members will fill the void. It’s possible that, assuming the Fed holds at next week’s meeting, some hawks on the Committee will use their respective bully pulpits to tee up a September rate hike.​

That could force Warsh’s hand, either squashing or confirming a quarter-point tightening at the September Fed gathering. Keep in mind that the 2026 Jackson Hole Economic Symposium, hosted by the Kansas City Fed, is slated for August 27-29. Thus, Friday, August 29, could be a crucial morning for the bond market and global investors.​

Oil Is the Wild Card​

In the here and now, the focus will be on earnings, along with developments in the Middle East. Brent crude oil hovers around $90 per barrel amid continued U.S. strikes on Iran, while crack spreads (the price difference between crude oil and refined products, like gasoline) are at a record level, confirming extremely tight distillate (the end products) supply-demand balances.​

Traders can see this in equity price action: two of the largest U.S. refiner stocks, Marathon Petroleum (MPC) and Valero (VLO), are up 96% and 95%, respectively, so far in 2026. Commuters feel the heat, too, with the AAA average gas price topping $4 once again this week. The upshot? Higher energy prices might upend the disinflation narrative if geopolitical tensions persist.​

The Bottom Line​

There’s a lot for investors to weigh. Encouraging inflation and consumer spending data last week paired well with a stellar start to the Q2 earnings season. Still, "SaaSpocalypse" fears linger as the AI road twists and turns. We’ll know more as the summer plays out, with conference season ratcheting back up, back-to-school shopping numbers registering, and perhaps clues on the Fed’s next direction.

Keep up with all the macro and corporate event-level data as our team sifts through the noise to spot the signal in today’s fast-changing market.

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