Dow Eyes Glory, PPI Glares Back

Good Morning. The Dow is once again strutting close to a record, helped along by Berkshire's sudden fondness for UnitedHealth and the market’s stubborn faith in a September rate cut. Then the Producer Price Index showed up like an uninvited guest, reminding us that cost pressures don’t vanish just because equities look pretty.

Meanwhile, AI keeps rewriting job descriptions faster than HR can draft them, and corporate America is grappling with whether to fill fewer chairs or train people to code prompts.

Add in tariff ripples, a caffeine-fueled race for speed at Starbucks, and a global e‑commerce arm‑wrestle, and the ticker tape barely has time to settle.

Don't forget our trivia question at the bottom of the Newsletter

Let’s hit the tape.

– Truly yours, Fred Frost

📉 Yesterday's Market Recap

A hotter‑than‑expected wholesale inflation print took the breeze out of the Dow’s sails, even as the S&P 500 eked out a minor gain. Sector breadth was poor, with only a few pockets of strength.

• Dow slips 10 points on PPI spike: The index closed at 44,911.26 after July PPI showed its sharpest monthly rise in three years. → Benzinga


• S&P 500 holds record despite breadth: The benchmark inched up 0.03% as big tech offset weakness in seven of ten sectors. → ABC News

📉 Daily Performance Snapshot

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🔭 What to Watch Today

Earnings, retail data, and geopolitics will test the staying power of this rally.

💡 Opportunity Watch

Even with volatility nudging higher, select themes tied to policy and fundamentals are flashing entry points.

• First Solar (FSLR): Benefiting from domestic manufacturing incentives and tariff-protected supply chains, valued at moderate risk with upside. → Seeking Alpha
• JD.com gears up for global push: Launches Joybuy platform and European deal, aiming to mirror Amazon’s overseas success. → Benzinga
• Western Asset Global High Income Fund (EHI): High yield at a discount with recent outperformance—appeals to income-focused investors. → Seeking Alpha

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🔥 The Big Bullet

Dow Poised for Year’s First Record High Despite Inflation Crosswinds

What happened: The Dow Jones Industrial Average is on the verge of hitting its first record high of 2025, propelled by strong corporate earnings and investor optimism. Futures pointed higher on Friday morning, bolstered by a 12.6% premarket surge in UnitedHealth stock after Berkshire Hathaway disclosed a stake. Despite underperformance of some index heavyweights this year, gains from names like Nvidia and Boeing have lifted the average nearly 20% since April lows. Support also comes from hopes of a Federal Reserve rate cut in September following tame CPI data earlier in the week, though Thursday’s hotter PPI print tempered that outlook. The Dow briefly stumbled after the inflation surprise but closed flat. To set a record close, it needs to rise just 103 points. Wall Street’s fear gauge has dropped to its lowest of the year, suggesting calm waters ahead—for now.
→ CNN

Why it matters: A record Dow would reinforce bullish sentiment, potentially attracting more retail inflows into equities. However, the PPI’s sharp rise complicates the Federal Reserve’s September policy calculus. Persistently higher input costs could squeeze margins, especially for Dow components in manufacturing and consumer sectors. The divergence between market optimism and inflationary data underscores the risk of overpricing rate cuts. Political elements like delayed tariffs also hang over corporate planning and investor assumptions.

What’s next: Traders will monitor upcoming retail sales and Fed commentary for confirmation of a September cut or a pushback. A breakout to new highs could see momentum players pile in, while a disappointment could trigger swift profit-taking. Watch for sector rotation as rising costs pressure profit forecasts.

• Dow futures edge higher after PPI data shock - Investing.com
• Chart of the Day: PPI’s warning signs - Seeking Alpha

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🧭 Policy & Market Ripples

• Starbucks races the clock: CEO Brian Niccol rolls out new service goals to sharpen customer experience and sales. → Fox Business
• CoreWeave sentiment stays hot: Retail traders stay bullish despite steep drop on earnings miss, buoyed by Nvidia stake news. → Stocktwits