Why Falling Inflation No Longer Helps Stocks

Stock Market and Inflation Dynamics
The stock market experienced a mixture of gains and losses this Wednesday as investors assessed the latest Consumer Price Index (CPI) figures. According to Sevens Report, the market ended the day with a modest rise of 0.38%. Initially, optimism was high as the headline July CPI came in below expectations, marking a drop in inflation below 3% for the first time since early 2021. However, the core CPI remained steady at 3.2%, still above the Federal Reserve's 2% target, leading to a more cautious attitude.