US stock markets continue to recover this week with the S&P 500 rising for the fourth straight session. While these rises came with more data indicating that inflation continued to decline faster than expected, which may eventually lead to the expectation of a cycle of raising interest rates by the Federal Reserve after the expected hike in its meeting on July 26.

Producer Price Index (PPI) figures were the main driver for the markets yesterday, which came after the CPI figures for the month of June. As the headline PPI reading recorded an inflation by only 0.1% in June, compared to what it was in May of this year and June of last year, which in turn is lower than expectations of 0.2% and 0.4%, respectively. As for the core PPI reading, which excludes food and energy items, inflation increased by 0.1% and 2.4%, compared to 0.2% and 2.6%, respectively, for the monthly and annual readings. US PPI figures followed the weaker-than-expected China PPI figures for the same period we saw earlier this week.

Yesterday’s gains were supported by yesterday’s labor market figures, with initial jobless claims recording the lowest weekly reading since June 8 of this year, at 236,000 claims, compared to expectations of 250,000.

As for the most active stocks, we witnessed Nvidia stocks rise to their highest historical levels, and the company’s market capitalization exceeded $1.1 trillion, after gains of 4.73% yesterday. Also, the Alphabet stocks, the parent company of Google, rose 4.7% with the company’s intention to launch the artificial intelligence product Bard in Europe and Brazil, which is a competitor to the ChatGPT product from OpenAI.

In corporate news, the earnings season for airlines for the second quarter began with Delta Airlines announcing results for the second quarter, in which it recorded historic profits and revenues, taking advantage of the travel boom after the pandemic. The company recorded earnings per share of $2.68 and revenues of $15.5 billion, exceeding analysts’ expectations.

On the other hand, we witnessed a decline in some of the shares of oil companies, such as the shares of Exxon Mobil and Chevron, which fell by 1.95% and 2.13%, respectively, yesterday, with the International Energy Agency trimming its expectations for oil demand this year, due to the pressure of the decline in industrial activity.

US yields continued to decline yesterday with expectations that the monetary tightening cycle is about to end. The yield on two-year Treasury notes – which are highly sensitive to short-term interest rate changes – fell to a one-month low of 4.605% at the height of yesterday’s declines.

S&P 500 futures are trading relatively stable today, with anticipation of the start of the earnings season for major US banks, with JPMorgan Chase and Citi Group announcing second-quarter business results today.