Inflation resurfaces Latest price data from the Labor Department signals a potential reacceleration of U.S. inflation, while investors continue evaluating the Federal Reserve's rate-cut possibilities. Meanwhile, Nvidia (NVDA.O), riding multiple tailwinds, propelled U.S. equities upward.

Key inflation metrics revealed the Consumer Price Index (CPI) climbed 0.3% month-on-month and 2.7% year-on-year through June – the highest annual reading since February. The core CPI, excluding volatile food and energy components, rose 0.2% monthly (below the 0.3% consensus) and 2.9% annually (matching forecasts).

Sectoral breakdown showed automotive prices declining, with new vehicles down 0.3% and used cars/trucks dropping 0.7%. Conversely, tariff-sensitive apparel surged 0.4%, while household goods impacted by import levies jumped 1%. Shelter costs edged up just 0.2% monthly, yet remained the primary inflation driver with a 3.8% annual increase. Within housing, owners' equivalent rent advanced 0.3% while lodging away from home plunged 2.9%.

Food prices rose 0.3% monthly (3% annually), energy rebounded 0.9% after May's decline, medical services climbed 0.6%, and transportation services inched up 0.2%.

Noted Fed analyst Nick Timiraos observed these figures could maintain policymakers' caution. Officials anticipating stronger tariff impacts later this year found little reason to alter projections, especially if retailers delay price adjustments. June's data elevates the significance of upcoming July/August releases. Similarly, policymakers dismissing tariff inflation concerns saw scant evidence to revise their stance.

Prior to June, 2024 inflation had trended downward despite early-year trade conflict worries. The latest data suggests tariffs are gradually influencing prices.

Markets remained steady post-release: Tuesday's opening saw the Dow Jones Industrial Average dip 0.1% while the S&P 500 (.SPX) and Nasdaq Composite (.IXIC) gained 0.36% and 0.73% respectively. Current projections indicate the Fed will maintain rates at July's meeting before implementing a 25-basis-point cut in September.

Despite President Trump's persistent rate-cut demands and claims that tariffs won't fuel inflation, Fed officials maintained their stance, citing economic resilience. Trump simultaneously escalated pressure on Chair Jerome Powell, vowing to replace him before Powell's term concludes in May 2026.

Leadership uncertainty Administration officials publicly amplified Trump's campaign against Powell. Treasury Secretary Scott Bessent confirmed initiation of "formal procedures" to identify potential successors to the Fed chair. "We'll see the pace of progress," Bessent stated, noting multiple qualified candidates while emphasizing the decision rests solely with Trump. He added that Powell remaining on the Board post-chairmanship would create confusion.

Nvidia's market surge Nvidia shares skyrocketed over 4% at Tuesday's open, surpassing $4.1 trillion in market value. The catalyst came as CEO Jensen Huang confirmed U.S. government approval for exporting H20 AI accelerators to China. "We can start shipping. I'm thrilled," Huang declared during a CCTV interview.

The H20—released in late 2023 as a regulatory-compliant solution featuring Hopper architecture and CoWoS advanced packaging—targets Chinese AI inference and mid-scale training markets. This followed export restrictions on Nvidia's A100, H100, A800 and H800 GPUs. Shipments had paused since April when the U.S. mandated special licenses for H20 exports over supercomputing concerns, as disclosed in SEC filings.

Concurrently, Huang announced the upcoming RTX PRO graphics card, designed specifically for computational graphics, digital twins and AI applications. Nvidia's website positions RTX PRO as a high-performance platform for professionals across architecture, industrial design, advanced VFX, scientific visualization, LLM fine-tuning and local AI operations.