Banks, CPI and Warsh: What Happened in the Most Intense 48 Hours of the Quarter
Disclaimer: This article is for educational purposes only. It does not constitute financial advice. Official data released on July 14 and 15, 2026.
Dense 48 hours. June CPI delivered the largest dovish surprise of the year, all five major banks beat earnings with widely different reactions, Warsh testified before Congress putting a brake on the enthusiasm, and this morning ASML raised annual guidance. Recap of what happened and what it implies for the rest of the week and the July 29 FOMC meeting.
June CPI — the dovish surprise of the year
The BLS released yesterday at 8:30 AM ET the June inflation data. Positive surprise across the board:
| Metric | June 2026 | Consensus | May 2026 |
|---|---|---|---|
| Headline CPI monthly | −0.4% | −0.1% | +0.1% |
| Headline CPI annual | 3.5% | 3.8% | 4.2% |
| Core CPI monthly | 0.0% | +0.3% | +0.2% |
| Core CPI annual | 2.6% | 2.9% | 2.8% |
Largest monthly headline CPI drop since April 2020. Driver: gasoline −5.7% in the month, direct consequence of the US-Iran ceasefire and Strait of Hormuz reopening. But what matters for the Fed is core: 0% monthly and 2.6% annual (below 2.9% consensus).
Market reaction was immediate: July 29 rate hike odds fell from 35% to 15% in minutes per the CME FedWatch. 10-year Treasury dropped 11 basis points. Dollar weakened against euro and yen. Gold and Bitcoin bounced.
The five banks — broad beat, opposite reactions
All five beat consensus. But the stocks split completely:
| Bank | EPS | Revenue | YoY profit | Reaction |
|---|---|---|---|---|
| JPMorgan (JPM) | Record $21.2B net | $58B | +41% | +1.49% |
| Goldman Sachs (GS) | $20.98 (vs $14.47 e) | $20.34B | Record Q | +7.63% |
| Bank of America (BAC) | $1.21 (vs $1.14 e) | $31.6B | +27% | +1.26% |
| Wells Fargo (WFC) | $2.00 | $22.62B | +25% | −3.31% |
| Citigroup (C) | $3.15 (vs $2.73 e) | $24.8B | +61% | −5.77% |
Goldman Sachs (+7.63%) — best quarter in its history
46% beat over consensus. Investment banking and trading drove results, with the SpaceX IPO as the main M&A pipeline catalyst. The press conference confirmed "the most solid pipeline since 2021". Wall Street raised targets: JP Morgan to $720, Morgan Stanley to $710.
JPMorgan (+1.49%) — record profit
Record net profit of $21.2 billion. Revenue $58 billion. Flat NIM and stable credit quality — no negative provision surprises. Dimon was neutral on the call: "solid results but the economy shows mixed signals". Moderate reaction reflects the price had priced in most of the beat.
Bank of America (+1.26%) — solid surprise
Beat on EPS (+6% over consensus) and revenue (+3.6%). ROTCE of 17%. Corporate account kept growing. Nothing extraordinary but clear cycle validation.
Wells Fargo (−3.31%) — beat with no catalyst
Beat consensus but no notable operational news. The market expected a signal on the Fed-imposed balance sheet cap; Warsh did not lift it and the stock punished the absence of catalyst.
Citigroup (−5.77%) — the bearish exception
EPS +61% YoY and best quarter in a decade. And still, the stock fell 4.16% in the session. Reason: management kept annual guidance unchanged and announced higher H2 investment (technology and compliance). The market read "expenses coming" before "profits already earned".
Warsh in Congress — the hawkish brake
Kevin Warsh appeared yesterday before the House Financial Services Committee for his first semiannual testimony. When asked about the morning's good CPI print, he responded:
"There might be some that look at this morning's data and say mission accomplished. That is not my view."
He repeated that the Committee "has no tolerance for persistently elevated inflation" and that the Fed keeps "resolute commitment to restoring price stability". Additionally, he announced five internal task forces reviewing: Fed communication, balance sheet management, use of economic data, productivity/employment framework, and inflation goal framing. It is an important institutional change.
On the economy: "AI investment is the most striking feature of the current landscape, and the Fed is monitoring its implications for inflation and employment".
The message prevented the CPI rally from going further. S&P 500 closed +0.38% at 7,543.89, Nasdaq +0.90% at 26,107.01 — moderate gains for what could have been.
ASML this morning — AI capex validated
Pre-open, ASML released Q2 results. Strong numbers and raised guidance:
- •Q2 revenue: €9.3 billion (vs €8.8 in Q1).
- •Gross margin: 54.0%.
- •Net income: €2.9 billion, EPS €7.59.
- •Q3 guidance: €11-12 billion (strong pace step-up).
- •Full-year 2026 guidance raised: €43-45 billion (from prior range).
Market read is clear: TSMC and hyperscalers keep ordering EUV. 2027 projected AI capex holds or increases. Direct positive input for Nvidia, AMD, TSMC, Broadcom and the full chain. ASML up 6.8% in European pre-market.
How the July 29 Fed scenario stands
Before CPI: 35% July hike probability, 45% hold, 20% surprise cut. After CPI + Warsh: 15% hike, 65% hold, 20% cut. Base case is still hold, but the cut weight is growing.
The contradiction between data and Warsh message is the tension defining the meeting. Data pushes dovish; message is hawkish. Many operators are pricing that Warsh "caves in September" with a 25 basis point cut, not in July.
What is left this week
- •Wednesday 15 (today) 2:00 PM ET: Fed Beige Book.
- •Thursday 16 pre-open: TSMC — confirms or denies the hyperscaler capex ASML validated today.
- •Thursday 16 after close: Netflix — focus on subscribers and advertising.
- •Thursday 16 8:30 AM ET: June Retail Sales + Initial Claims + Philly Fed.
- •Friday 17: American Express + Michigan preliminary sentiment.
The joint read with what was released in the last 48 hours will give the best real-time picture of the economic cycle and AI capex. A TSMC with in-line ASML guidance would fire semis; a Netflix with subscribers below guidance would cool mega-cap tech.
Frequently Asked Questions
Why did Citigroup fall if it beat consensus?
Because the market already prices announced earnings and punishes signals of higher future spending. Citigroup kept annual guidance unchanged (did not raise it) and announced increased H2 investment (technology and compliance). Read as "margin cut for investment" before "going to grow more".
Can the Fed cut in September despite Warsh's message?
Yes. Warsh's message keeps optionality — does not close the door to cuts. If July CPI (released August 12) confirms moderation and employment keeps cooling, a September cut is feasible. Warsh himself said "a single reading is not enough" — implying two or three consecutive readings are.
Where can I see updated diagnostic of the banks?
At stocksanalyzer.app/analyze by entering the ticker: JPM, GS, BAC, WFC, C, MS. Full diagnostic includes Health Score, Monte Carlo, RSI and post-earnings consensus.
Reference sources: Bureau of Labor Statistics (bls.gov), Federal Reserve (federalreserve.gov), SEC 8-K filings for JPM/GS/BAC/WFC/C/ASML, CNBC, CME FedWatch Tool, Warsh testimony available at federalreserve.gov.
Written by the StocksAnalyzer team. Content reviewed and updated as of July 15, 2026.