US Inflation Data: Fed's Expectations Shaken by 0.02% Drop and Market Reaction

The U.S. June consumer price index (CPI) data delivered a shock to markets, with core CPI falling by just 0.02%. This pushed the annual rate down to 2.6%, dramatically altering the Federal Reserve's outlook. Treasury yields dropped sharply, and the odds of a Fed rate hike in July plummeted from 99% to near zero. Goldman Sachs and other big banks performed well, but IBM's admission that AI spending was eating into software budgets sent tech stocks tumbling. China's 4.3% GDP growth, while below forecasts, boosted the yuan. How will markets react to these data points? Which factors will prove critical in reversing inflation trends?