Evening Memo | CPI shock sent rates higher; earnings guide tomorrow’s momentum
• What moved today: Stocks and rates repriced after a hotter-than-expected CPI print. • What changed after hours: Oracle beat and flagged much-larger AI capex; Navan raised FY27 guidance.
What Moved Today
Market Recap — CPI topped headlines and pushed front-end rate pricing, while a large crude draw tightened prompt oil balances; a solid Treasury auction and thinner May budget deficit eased some term-premium pressure. BLS CPI showed headline strength driven by energy and modest core gains, feeding USD and short-term Treasury moves ($ZN=F, $DX=F). The EIA reported a 7.2m bbl crude draw that lifted crude futures and pressured product spreads ($CL=F, $RB=F). Treasury’s 9y11m sale cleared with decent demand, supporting the belly of the curve ($ZB=F, $ZN=F).
Intraday — From the open, May CPI surprised higher with energy contribution, prompting front-end repricing and USD moves against major crosses ($ZN=F, $DX=F). The EIA’s 7.2m bbl crude draw and higher refinery utilization tightened the prompt crude picture and boosted crude futures ($CL=F, $HO=F). A USD 39bn 9-year-11-month Treasury auction stopped slightly through WI with strong indirect demand, and the Monthly Treasury Statement showed a narrower May deficit but sharply higher interest costs, influencing curve positioning ($ZB=F, $ZN=F).
After Hours — Oracle reported a small revenue beat, stronger adjusted EPS, and flagged FY2027 AI capex up to USD 95bn, a sizable upside versus expectations, repricing its cloud/AI narrative ($ORCL). Navan raised FY2027 revenue and adjusted operating profit guidance after strong Q1 growth and booking volume, lifting its outlook into positive operating leverage ($NAVN).
Our Read — Today’s inflation and oil data set a two-way market: front-end rates and USD will test whether CPI momentum persists. Earnings and guidance surprises tomorrow should determine sector leadership and near-term equity direction.
