S&P500 Hit a New All-Time High on Favorable US CPI; Ethereum Nears All-Time Highs

The US CPI print can be sliced and diced to suit one’s underlying biases, but the market is the market—and it has spoken. Relief spilled over into renewed upside momentum in risk assets, forcing many to chase the tape. Tariff effects did prove to be a factor in lifting prices, but the observed pass-through was gradual. The read to core PCE puts the tracking rate between 0.24% to 0.29% month-over-month, with the US PPI print (due tomorrow) offering further inputs that will help model the outcome of the Fed’s preferred inflation gauge. Aside from the US PPI print, attention now turns to the retail sales report on Friday. However, it will be the nonfarm payrolls (NFP) report—released on 5 September—that everyone is waiting for. That said, with US interest rate swaps implying a 93% probability of a 25bp cut at the September FOMC meeting, the market holds a high expectation that the NFP print will be sufficiently weak to prompt the Fed to ease. Further out the rates/swaps curve, any repricing of expectations has been orderly, with SOFR futures adding a modest 2 basis points or so in additional rate cut expectations across contracts into 2027—certainly not what you’d expect if the first market you looked at was the Russell 2000 (+3%) or the cryptosphere (Ethereum +8%). 

New ATHs for the S&P 500 and NAS100

US equity markets have found real form, with the S&P 500 closing at session highs and 80% of S&P 500 companies closing in the green. While cash equity volumes were a touch below the 30-day average, both the S&P 500 and NAS100 closed at new all-time highs. Small caps have flown, and cyclical areas of equity have outperformed—not the sort of vibe seen in late-cycle economics, but more that the goldilocks backdrop for risk remains in play. Funds continue to sell short-dated volatility, picking up pennies to enhance returns; the Fed is expected to ease 100bp over the coming 12 months; corporate equity buybacks are prolific; and earnings aren’t too shabby either.

The USD also offers US multi-nationals tailwinds for future earnings. Granted, a 45bp one-day move lower in the DXY is not going to move the dial much, but if the market sees a higher probability of a retest of the 24 July swing low of 97.10, and even the 12-month lows of 96.37, then it can make a difference. 

Will We or Won’t We Receive the August NFP Report? 

Reports that EJ Antoni, Trump’s nominee for the new head of the BLS, suggested suspending the August NFP data release due to its inaccuracies have also done the USD no favors and may have incentivized foreign investors to review their hedging ratios on US investments. 

Given that the NFP report is one of, if not the most important, data releases in the global economic calendar, it would be a drastic step for the BLS to cut it. Its importance in pricing risk around the September FOMC meeting can’t be overstated. Without the NFP print, the visibility needed to efficiently price future policy outcomes is challenged. 

That said, it seems the comments by EJ Antoni were made prior to his nomination—presumably hitting the right tone with Trump and increasing his chances for the job—and with the Senate still required to vote him into the role (but in recess until 2 September), one would imagine the August NFP print will still be released. 

Ethereum in Beast Mode

Crypto is flying high, with Bitcoin back above $120k and some upbeat moves higher seen across various altcoins. However, it’s Ethereum that gets the airtime. After consolidating above the December 2024 breakout point, the bulls have pushed the price into the 4600s, with FOMO and momentum chasing firmly in play. The intraday tape portrays a strong low-to-high trend day. 

Ethereum’s ATH was seen at 4866, which is not too far off and may now act as a magnet. While the market chases, fundamental drivers continue to underpin the move, with Ethereum treasury buying remaining a tailwind. These entities have bought around 1.7% of ETH in circulation since June, while consistent inflows into the ETHA ETF and a progressively favorable regulatory environment also keep the dream alive. 

Asia to Find Buyers on Open 

Asia will take the lead from Wall Street, with opening calls suggesting the HK50 opens +0.6%, ASX200 +0.4%, and NKY225 +1.4%. The ASX200 gets close inspection as traders and investors react to CBA’s FY earnings, where on first blush, cash earnings, NIM, and its final dividend look very much in line with sell-side consensus estimates. Will ‘in line’ be enough to warrant the sky-high valuation? Perhaps not. But when CBA has been predominantly driven by passive flows, valuation has been a poor predictor of future returns. As such, one can easily see a situation where if we do see selling on the open, the stock reverses and pushes higher through the day.