Futures were trading lower this morning on more bellicose comments from Trump (“they will pay a hefty price…”). A better-than-expected CPI print pulled rates lower and sent futures higher ahead of the open, though all that did was allow the S&P 500 to open down 0.5%. The equal-weight and small caps were a little better but still started lower as well. Early tech weakness was again a drag. The S&P quickly rallied into slightly positive territory after the Open but was unable to do hold the move. The S&P is currently down ~1%, just above the lows of the day. The equal-weight, mid-and small caps are lower but outperforming.

Industrials is the lagging sector. Freight names were pressured on news Amazon would expand its less-than-truckload freight offering. The weakness is broadly sprayed across the sector though with airlines, defense, construction, electric and construction names all notably lower. Discretionary is lagging as well, with autos, travel & leisure and homebuilders leading lower. Energy is the outperformer on commodity strength and the defensive Staples sector is higher as well.

CPI was the major data release today and as we noted came in a bit cooler than expected. Headline was inline, up 0.5% m.m and 4.2% y.y, driven primarily by energy as expected, while food moderated. Core was up 0.2% versus last month, a tenth better than expected. The 2.9% y.y increase was inline and up from 2.8% last month. Brent crude is up ~3%, moving higher on Trump’s “hefty price” comments this morning and continuing to climb throughout the day. Crude inventories continue to be drawn down. Metals are lower with gold weak in particular, breaking down further after the 200d ma failed as support last week. Copper is down as well, approaching the rising 50d ma after trading near all-time highs earlier this month. Bitcoin is around unchanged, trying to hold above $62K.