CPI Still In Focus

Stocks rise as the market is now fully pricing in a September rate cut.

August 14, 2025

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Your Daily Dose of Market & Career Clarity

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🎯 In this issue:

  • Banana Bits: Finance headlines that actually matter

  • Market Recap: CPI report gave stocks the green light to rip

  • Technical Trip: Interview Q&A from Barclays

  • What’s Ripe / Rotten: The tastiest and most disgusting stocks 

  • Lesson from the Library: How to write a pro-level equity research report 

Market Snapshot

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Market Recap

Stocks rise

Wall Street traders are now fully pricing in a September rate cut as stocks continue to rise after the favorable inflation data released Tuesday. Treasury Secretary Scott Bessent also believes the Fed could go on “a series of rate cuts.” 

Shorter-term bond yields sank as traders continued to price in the September rate cut, with the 2-year U.S. Treasury dropping to 3.68%.

 

 

Some Wall Street professionals like Ulrike Hoffmann-Burchardi at UBS Wealth Management believe the Fed will cut rates by 25 basis points each meeting until January 2026, resulting in 100 total basis points. 

Something else to keep in mind is that there is still another CPI report before the September meeting, which can have major implications on the Fed’s decision, especially since it's released less than a week before the FOMC meets. 

Speaking of the Fed, Donald Trump also announced that he is down to 3-4 candidates for the next Chair of the Fed, which he said he would be announcing in about a week. The newly appointed Chair will begin his/her term in May 2026. 

Additionally, a closer look at the CPI data released on Tuesday also reveals that underlying U.S inflation advanced in July, but much of those costs were absorbed by corporations, resulting in the cost of tariffed goods not rising as much as expected. 

Therefore, given Jerome Powell’s “wait and see” approach to rates, a higher-than-anticipated August CPI report could result in the FOMC holding rates. 

Regardless, stocks are continuing their rally as a direct result of diminished tariff fears and overall strong earnings. Many Wall Street professionals believe that most of the stock gains this year are “already in.” 

What's Ripe

Webtoon (WBTN) 81.20%  

  • Webtoon’s stock skyrocketed yesterday when they announced a deal with Disney, bringing iconic franchises like Star Wars and Marvel to its platform.

  • This was the web comic platform’s best day on the markets since its IPO last June. 

Sapiens International Corporation (SPNS) 44.3%  

  • Software company Sapiens International saw its stock price soar yesterday as they announced they were being acquired by private equity firm Advent International.

  • They announced they were being bought out at $43.50/share, nearly a 65% premium to their pre-acquisition share price. 

What's Rotten

CAVA Group (CAVA) 16.6% 

  • CAVA, a fast-casual restaurant chain, witnessed a sharp decline in their share price after they missed Q2 earnings and lowered their full-year revenue guidance.

  • CAVA reported a same-store sales growth of 2.1%, below the expected 6%, and revenue of $278 million, below the expected $285 million. 

Centrus Energy Corporation (LEU) 13.8%  

  • LEU’s stock dropped considerably yesterday after they announced a $650 million convertible debt offering, causing investors to sell due to fears of dilution. 

  • Despite the selloff, LEU was able to beat earnings for Q2, which they reported on August 5th. 

🧠 Technical Trip

Interview Q&A from Barclays

👉 Want 1-on-1 recruiting help from Barclays bankers & 2,000+ top mentors? Apply to WSO Academy

📚 Lesson from the Library

Check out an equity research report applying insights from our Investment Banking and Investment Analysis courses.

🦈 Deal Deep Dive

M&A, IPOs, And Other Notable Transactions

Banana Brain Teaser

Previous

How many prime numbers between 1 and 100 are factors of 7,150?

Answer: 4

Today

A tank contains 10,000 gallons of a solution that is 5% sodium chloride by volume. If 2,5000 gallons of water evaporate from the tank, the remaining solution will be approximately what percent sodium chloride?

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The whole secret to winning big in the stock market is not to be right all the time, but to lose the least amount possible when you’re wrong.

William J. O’Neil

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Happy Investing,
Chris, Vyom, Ankit, Colin, & Patrick