CPI Calms Markets, SMCI Surges on AI Bet

Macro Backdrop

July CPI printed in line with forecasts today. That single data point reset the mood across markets. The VIX dropped sharply. Options flow swung toward calls on rate-sensitive names. Volatility is also tumbling in Europe, with the FT reporting the fear gauge falling to pre-Middle East-conflict levels even as oil remains elevated. Yen weakness returned too — the currency gave back roughly half its gains from the recent US-Japan intervention.

US Highlights

Super Micro Computer is the session's standout. Fresh guidance signalled a sharp acceleration in growth. Analysts raised the consensus price target by 9% to $41.38. The news eased fears the server maker was losing ground to rivals in AI infrastructure. Short interest remains elevated, making a squeeze scenario possible.

RIOT surged after news of an Anthropic deal marking its pivot toward AI infrastructure. The stock is up 60% year-to-date. IREN also jumped, riding the same AI-meets-crypto infrastructure wave.

Cencora flagged that certain Walgreens volume is moving outside the company from July 1. The distributor reaffirmed full-year EPS guidance of $17.75–$17.95. The news hit the stock but the guidance held firm.

Private equity firms are reportedly circling Trimble's transportation unit, according to an Axios exclusive. M&A activity in enterprise software remains brisk.

Cisco reports Q4 2026 results after the close today. Markets will scrutinise AI infrastructure spending guidance closely.

Europe Watch

Volatility across European markets has eased notably. Defense stocks remain a bright spot following Ukraine's ratification of a €105 billion EU loan. Chinese robot maker Unitree's upcoming Shanghai IPO drew 5,500x retail oversubscription — a sign that risk appetite in Asia is very much alive. Deutsche Bank became the first European clearing bank for renminbi, a milestone in yuan internationalisation.

Short Interest Corner

Bears remain active in biotech. Replimune short interest climbed to 43.8% of free float. CoreCivic saw a near-fourfold spike to 10.2% in a week. Chewy holds at 95.6% with no squeeze yet — availability stays ample at 477%.