Stocks closed mostly higher yesterday led by the S&P with a 0.38% gain.

Yesterday's Producer Price Index (PPI ? wholesale inflation) showed the same type of progress that the previous day's CPI (retail inflation) report did, if not better. The PPI headline number was up 0.1% m/m vs. last month's -0.2% pace and views for 0.2%. The y/y rate was up 2.6% vs. last month's 2.4% and estimates for 2.6%. The core rate (ex-food & energy) was up 0.1% m/m vs. last month's -0.2% and the consensus for 0.3%, while the y/y rate eased to 3.0% vs. last month's 3.1% and estimates for the same.

Within the last 4 months, core PPI has gone from 3.6% to 3.0% today, defying worries and predictions that inflation would go up.

While it's highly unlikely this moves the Fed to cut rates when they meet next week on 6/18 (the odds are 99.5% that the Fed holds rates steady), it helps bolster the case for a rate cut sooner rather than later. Currently, the likelihood is at 74.6% for a rate cut in September, bypassing the July meeting. But if inflation continues to show improvement, that timeline could be moved up.

The market appeared to brush off President Trump's comment on Wednesday night that he would likely set new unilateral tariffs within weeks.

But it was likely interpreted that it would apply to smaller partners that make up only a fraction of U.S. trade. A logical conclusion since earlier in the day Treasury Secretary Scott Bessent said that the U.S. has 18 "important trading partners," and that the Administration is "working toward deals with those countries." But added that the White House was open to extending the 90-day pause on reciprocal tariffs to those who have shown "good faith" in ongoing trade negotiations.

Since it would be nearly impossible to get signed deals with 100+ trading partners all within that 90-day pause window (which only has about 1 month left), they kept the door open for those in the midst of negotiations. But eventually, smaller partners that are not in negotiations will likely be given a new tariff rate, and talks can proceed from there.

In other news, Weekly Jobless Claims were up 1,000 at 248,000 vs. last month's 247K and estimates for 243K.

Today we'll get the Baker Hughes Rig Count report and Consumer Sentiment.

With 1 more day to go, all of the major indexes are in the green for the week. If they finish that way, that would make it 3 up weeks in a row. And put the big three indexes within striking distance of their all-time highs.

Best,