U.S. consumer inflation rose 0.1% in July from the previous month and 3.4% from a year earlier; core inflation was 0.2% monthly and 2.5% annually. Wall Street rallied: the S&P 500 gained 0.3%, the Nasdaq Composite 0.5% and the Russell 2000 0.6%. Semiconductor ETF SMH ($SMH) rose 2.05% and Nvidia ($NVDA) 3.06%, while software-company ETF IGV ($IGV) fell 0.82%. CPI started the rally, but it did not end the split within technology.

Relief was limited in Treasuries. The benchmark 10-year yield fell from 4.70% to 4.68%, but the Treasury's $42 billion auction stopped at a high yield of 4.683%. Brent ended Wednesday at $88.98 and is around $88.89 this morning. The CPI headline softened; the rally's continuation now depends on the Treasury yield and producer prices staying calm.

Tunç Şatıroğlu (@tuncsatiroglu) sees the easing in the Treasury yield and dollar index as supportive for risk assets. Bora Özkent (@boraozkent), meanwhile, stresses that although demand for AI infrastructure remains strong, the cost of capital is decisive for loss-making companies. Wednesday's pricing combined the two frameworks: chips rose, software fell and the Treasury yield remained high.

Key takeaways

  • Shelter costs in the U.S. July CPI rose 0.1% from the previous month, while energy prices fell 1.5%. Today's producer-price report will test how durable the headline relief is.
  • The S&P 500 reached 7,748.50, just below the 7,750 threshold; QQQ, which tracks the Nasdaq 100, approached $725 resistance at $723.61. SMH climbed to $584.79 while IGV fell to $103.11. The chip rally has not yet spread across technology.
  • Associated Press (@AP) reported that CoreWeave rose 19.3%, Super Micro 19% and Nvidia 3%. Strong AI demand was priced in, but high financing costs are making investors more selective about indebted and loss-making companies.
  • Producer inflation is due today at 3:30 p.m. TRT, the 30-year Treasury auction at 8:00 p.m. and the Applied Materials earnings call at 11:30 p.m. Data, the Treasury yield and chip demand will all be tested on the same day.

What happened?

  • The U.S. Bureau of Labor Statistics reported that July CPI rose 0.1% from the previous month and 3.4% from a year earlier. The core measure excluding food and energy rose 0.2% monthly and 2.5% annually.
  • Associated Press reported that the S&P 500 rose to 7,748.50, the Nasdaq Composite to 26,588.49 and the Russell 2000 to 3,045.48. The Dow Jones fell 21.58 points.
  • The U.S. Treasury's 10-year note auction stopped at a high yield of 4.683% with a bid-to-cover ratio of 2.53. The benchmark yield eased, but the long-term cost of borrowing remained high.
  • The U.S. Energy Information Administration reported that commercial crude inventories increased by 17.4 million barrels to 424.4 million in the week ended August 7. Brent nevertheless remained around $89; the disruption to passage through Hormuz has not been resolved.
  • The BIST 100 ended Wednesday 2.96% higher at 14,110.14. The index cleared 14,000, but dollar/TL at 47.7740 and Brent around $88.89 keep the cross-check on local costs active.

Market levels

Global risk and rates

  • Brent is around $88.89. Support is at $87, with near resistance at $90, the risk line at $95 and the regime threshold at $100. Holding above $90 would increase energy pressure; below $87 would provide the first sign of relief.
  • The U.S. 10-year Treasury yield is at 4.68%. Support is at 4.65%, with the directional threshold at 4.70% and the main risk boundary at 4.85%. A move above 4.70% would narrow the valuation relief in growth stocks; below 4.65% would strengthen it.

US indices

  • The S&P 500 closed at 7,748.50. Support is at 7,700, with first resistance at 7,750 and the continuation threshold at 7,800. A close above 7,750 would extend the record area; below 7,700 would slow the rally.
  • QQQ is at $723.61. Support is at $717 and $708.50, with resistance at $725. Clearing $725 would confirm technology leadership; below $717 would weaken the post-CPI gains.
  • IWM, the small-cap U.S. companies ETF, rose to $302.73. Support is at $302 and $299, with near resistance at $303.41. Holding above $302 would preserve small-cap participation; below $299 would undermine the broadening signal.

Sectors and themes

  • SMH rose to $584.79. Support is at $575 and $560, with resistance and confirmation at $585. Above $585 would strengthen chip participation; below $575 would reduce the rally's momentum.
  • IGV fell to $103.11. Support is at $101, with first recovery at $103.70 and main resistance at $108. Software cannot be said to have joined the chip rally until $103.70 is reclaimed; below $101 would widen the divergence.
  • Nvidia closed at $224.11. Support is at $213, while $224-$225 is the resistance and decision area. A close above $225 would open a new continuation area; below $213 would weaken the sector confirmation.
  • SpaceX rose to $146.18. The previous $134.88 breakout level is now first support, with the session high at $149.57 as near resistance. Holding above $134.88 would preserve the breakout; below $130 would reverse a substantial part of the move.
  • Rocket Lab is at $81.15. First support is around $76.74, with the main risk line at $74 and near resistance at $81.33. Holding above $76.74 would preserve the post-earnings recovery; below $74 would materially weaken the structure.

Precious metals

  • Spot gold is at $4,394.79 this morning, while gold ETF GLD ($GLD) closed Wednesday at $404.80. GLD has support at $400 and $395, with resistance at $405. The spot and ETF scales should be kept separate; holding above $405 in GLD would confirm metals participation.
  • Silver ETF SLV is at $59.07. Support is at $58, with first resistance at $60 and strong confirmation at $62. Clearing $60 would broaden the metals rally; below $58 would weaken the short-term structure.

Crypto

  • Bitcoin ($BTC) is around $63,854. Support is at $62,000, with first resistance at $64,400 and strong confirmation at $65,800. Reclaiming $64,400 is necessary to complete the short-term recovery; below $62,000 would increase the risk.
  • Ethereum is around $1,896 and XRP $1.010. Ethereum has support at $1,850 and resistance at $1,925; XRP has support at $1.00 and resistance at $1.04-$1.05. Both assets clearing their resistance levels would strengthen participation beyond Bitcoin.

Turkey

  • The BIST 100 closed at 14,110.14. Support is at 14,000 and 13,911, with near resistance at 14,130.99. Holding above 14,131 would extend the breakout; below 13,911 would turn the latest advance into a failed breakout.
  • Dollar/TL is around 47.7740. Support is at 47.70 and 47.59, while 48.00 is resistance and the main risk threshold. A simultaneous break above 48.00 and $90 Brent would increase pressure on local inflation and discount rates.

Red flags

  • If producer inflation comes in strong, the 30-year auction is weak and the 10-year yield clears 4.70%, the CPI relief will not feed through to valuations.
  • If the S&P 500 fails to clear 7,750 while SMH loses $575 and IGV loses $101, chip leadership will fade before spreading across technology.
  • If Brent holds above $90 despite the large inventory increase, Hormuz risk could push inflation expectations higher again.
  • If Bitcoin, Ethereum and XRP fall below $62,000, $1,850 and $1.00 together, crypto participation will break down.
  • If the BIST 100 falls below 13,911 while dollar/TL and Brent clear 48.00 and $90, pressure from local equities, the currency and energy will increase at the same time.

Calendar

  • August 13, 3:30 p.m. TRT: U.S. July producer inflation will be released. The pass-through of energy and transportation costs to company margins will be watched.
  • August 13, 8:00 p.m. TRT: The U.S. Treasury will complete its $25 billion 30-year bond auction. Demand for long-term Treasuries will be measured.
  • August 13, 11:30 p.m. TRT: Applied Materials will hold its fiscal third-quarter earnings call. Demand for chip equipment used in AI infrastructure will be tested.
  • August 14, 3:30 p.m. TRT: U.S. July retail sales will be released. The split between a weak consumer and a strong AI economy will be watched.

My analysis

July CPI reduced fears of another rate increase in the near term, but it did not fully restore demand for long-term Treasuries. The 4.683% yield at the 10-year auction shows that inflation alone was not enough to bring the Treasury yield down.

The quality of the equity rally lies more in the sector split than in the headline indexes. SMH rose 2.05% while IGV fell 0.82%, showing that capital did not flow evenly across technology. A sustainable broadening requires QQQ to clear $725, SMH $585 and IGV $103.70 together.

A 17.4 million-barrel inventory increase would normally have produced more visible price relief. Brent's ability to remain around $89 suggests that Hormuz and shipping risk continue to carry a premium independent of physical supply indicators.

The BIST 100's move above 14,000 is technically positive. For it to hold, the index needs to remain above 13,911 while dollar/TL stays below 48.00 and Brent below $90; otherwise external cost pressure will reduce the quality of the local rally.

Sources

This is not investment advice; it is a research and monitoring note.