Relief Rally Extends as CPI/PPI Calm Fears, Oil Stalls, Chips Confirm
A cooler-than-expected CPI/PPI print, a stalling oil premium, and confirming chip names let both S&P and Nasdaq futures extend their reclaim of key levels.
- Awaiting CPI/PPI prints this week: a cool read would validate today's relief rally; a hot read reopens the hawkish-Fed story.
- Awaiting oil's next move: continued stalling near $79-80 is manageable, a fresh push above $82 renews the inflation/multiple-compression risk.
- Awaiting chip-trade follow-through: NQ still sits below its 20DMA even after reclaiming the pivot — needs a second confirming session.
- Awaiting breadth confirmation at R1: a clean break of ES 7,626 / NQ 30,040 on volume would upgrade the read from relief to trend resumption.
U.S. equity futures extended their rally Wednesday as a cooler-than-expected CPI/PPI print calmed inflation fears, allowing both the E-mini S&P (ES) and the E-mini Nasdaq (NQ) to hold their reclaim of key levels from Monday's selloff. The ES reclaimed its 7,565 trigger level and the NQ reclaimed its 29,545 trigger, both now testing first resistance, while West Texas Intermediate crude held near $79.79 — elevated, but no longer accelerating the way it was Monday.
A Cooler CPI/PPI Print Calms Fears
The cooler-than-expected CPI/PPI print this morning removed the immediate threat of a hawkish Fed pivot, allowing both index futures to extend their reclaim of key levels from Monday's selloff. ES now trades above its 20-day and 50-day moving averages as well as its weekly and monthly VWAPs — a fully bullish technical alignment. NQ remains below its 20-day moving average, but the second straight Bull Body candle is a positive sign.
Oil Stalls, But Hasn't Retreated
West Texas Intermediate crude held near $79.79, with its five-day rate of change cooling to +8.53% from Tuesday's +13.2%. That's a meaningful deceleration, but it is not a retreat: oil remains near cycle highs, and the Strait of Hormuz situation is unresolved. The desk reads this as the risk premium pausing rather than fading, which caps the pace of further upside until crude actually retreats toward the mid-$70s.
Chips Get a Second Confirming Session
Semiconductor names confirmed their stabilization Wednesday after Tuesday's rebound, giving the Nasdaq contract its second straight constructive session since last week. Notably, NQ remains below its 20-day moving average even after reclaiming its pivot and Monday's trigger level — a sign the desk wants a second confirming session before treating the AI-leadership trade as fully repaired.
What It Means for Traders
Our desk reads today's setup as roughly 45% likely to see continuation if this week's CPI and PPI prints confirm the calmer tone and both contracts clear resistance with breadth, 35% likely to consolidate between pivot and first resistance while the market awaits that data, and 20% likely to see a pullback if oil re-accelerates or the inflation prints run hot.
On ES, support sits at 7,543 (S1) then 7,496 (S2), with key support at 7,461 (S3); resistance is 7,626 (R1) then 7,661 (R2). On NQ, support is 29,421 (S1) then 29,053 (S2), with key support at 28,803 (S3); resistance is 30,040 (R1) then 30,290 (R2). NQ remains the more sensitive contract until it closes back above its 20-day moving average.
The Rest of the Week
With today's cooler CPI/PPI print, the immediate threat of a hawkish Fed pivot has been removed, allowing both contracts to extend their reclaim of key levels. However, the desk still treats today's strength as a confirmed reclaim, but one still pending validation — not a resumption of trend. Until the Hormuz situation is resolved and crude retreats toward the mid-$70s, the desk will maintain a cautious outlook.
- ES reclaimed Monday's 7,565 trigger and trades at 7,593.75 (+0.86% 5D), now testing pivot/R1 resistance at 7,593/7,626.
- NQ reclaimed Monday's 29,545 trigger and trades at 29,867.00 (+1.35% 5D), now testing pivot/R1 resistance at 29,867/30,040.
- Fed Chair Warsh's balanced testimony from yesterday tempers the hawkish-minority scare from June's meeting minutes.
- WTI holds near $79.79 (+8.53% 5D, cooling from +13.2%) — the Hormuz risk premium is stalling, not fading outright.
- The 10-year Treasury yield holds near 4.58% from Monday's 4.585% close, a modest confirmation of the calmer tone.
- Continuation45%
- Consolidate35%
- Pullback20%
7,502.25
7,540
7,494.75
7,623.75
28,648.583
28,937.167
28,768.25
29,655.667
Net selling day; continuation risk if supports fail.
Net selling day; continuation risk if supports fail.
- 20DMA7,529.134below
- 50DMA7,494.889at
- VWAP-W7,569.026below
- VWAP-M7,560.171below
- 20DMA29,757.005below
- 50DMA29,680.707below
- VWAP-W29,407.901below
- VWAP-M29,615.509below
<strong>The tape held the reclaim triggers from yesterday, but the real confirmation event is still outstanding.</strong> CPI/PPI this week will tell us if today's strength is real or just relief.
| Catalyst | Today | Yesterday's Read | Desk Read |
|---|---|---|---|
| Oil (WTI) | $79.79, +8.53% 5D | $79.76, +13.2% 5D | Premium stalling near cycle highs, no longer accelerating. |
| Fed Communication | Warsh reads balanced | Warsh reads balanced | Yesterday's testimony tempers the hawkish-minority scare. |
| Chip Trade | Confirming, Bull Body candles | Stabilizing, Bull Body candles | Second-session confirmation still needed for NQ leadership. |
| 10Y Yield | 4.58% | 4.585% | Holding near Monday's close, supports the balanced-Fed read. |
<strong>Reading across the board:</strong> this is a genuine relief rally — both indices reclaimed Monday's trigger levels — but oil hasn't actually retreated, and CPI/PPI are still outstanding, so the desk treats it as confirmation-pending, not all-clear.
| Channel | Likely Impact | ES/NQ Implication |
|---|---|---|
| Oil stalling (not fading) | Removes further acceleration risk, but doesn't remove the existing premium. | Caps the pace of further ES upside until oil actually retreats. |
| Warsh balanced tone | Restores the "data, not Fed signals" framing. | NQ discount-rate pressure eases; growth multiples get room to expand. |
| Chip confirmation | AI-leadership trade gets a second confirming session. | NQ regains its offsetting bid, but below 20DMA still. |
| CPI/PPI this week | The real confirmation event for today's relief rally. | Both ES/NQ; a hot print unwinds today's reclaim fast. |
Desk call July 15: today confirms the reclaim of Monday's key trigger levels on both ES and NQ, but with oil still elevated and CPI/PPI outstanding, treat this as relief-pending-confirmation — size up only above R1 with breadth.
Bullclear and hold 7,626 (R1), extend toward 7,661 (R2) on CPI/PPI confirmation.
Bearlose 7,543 (S1) and revisit 7,496 then 7,461.
Executiontoday's reclaim is real but unconfirmed by CPI/PPI — add on strength through R1, not on the first push into it.
Bullclear and hold 30,040 (R1), extend toward 30,290 (R2) if chip names keep confirming.
Bearlose 29,421 (S1) and revisit 29,053 then 28,803.
Executionstill below its 20DMA — wait for a second confirming session before treating the chip-trade repair as durable.
| Driver | Executive Interpretation | Index Impact |
|---|---|---|
| Oil / Hormuz | Premium stalling near highs, not retreating outright. | Caps further ES upside pace until oil actually retreats. |
| Warsh testimony | Balanced tone restores data-dependence framing. | NQ discount-rate pressure eases; room for multiple expansion. |
| Chip trade | Confirming, but NQ still below 20DMA. | NQ's offsetting bid returns tentatively, not durably yet. |
| CPI/PPI (this week) | The real confirmation event for today's relief rally. | Both ES/NQ; a hot print reopens Monday's bearish path fast. |