Market Monitor News August 12 BMO - Tariff Truce, Chip Crosswinds, and a UFC Rights Bomb: Markets Catch Their Breath Before CPI

I walked in to a market that looked like it wanted a nap more than a rally: the Dow slipped about 0.5% and the Nasdaq eased 0.3% on Monday, a classic “wait-and-see” drift ahead of July CPI on Tuesday. No drama, just a collective inhale. The risk is that CPI surprises even a little and everyone exhales at once.

Macro: All Eyes on CPI and the Fed’s Wiggle Room

Consensus expects headline CPI to tick up to 2.8% YoY with core at 3.0% YoY for July. That’s not a disaster, but it’s not a bow-on-top either, especially with tariffs quietly adding friction to goods prices. A slightly hotter core would keep the “how fast can the Fed cut?” debate annoyingly alive.

I’m watching goods inflation and any sign of passthrough from tariffs; several previews flag that pressure as the swing factor this month.

Geopolitically, the White House extended the tariff pause with China by 90 days, sidestepping an immediate jump in duties and keeping the door open for a Trump–Xi meeting later this year. That eases one near‑term tail risk, even if it leaves the bigger issue untouched.

Sentiment-wise, the Bank of America Fund Manager Survey is a mood ring you can see from space: a record 91% of respondents say U.S. equities are overvalued. Translation: plenty of people think we’re rich, which can amplify downside if CPI disappoints.

Semis: Micron’s Tailwind, Nvidia/AMD’s China Math

Micron (MU | +4.06%) raised its fiscal Q4 revenue and EPS outlook on stronger pricing, especially in DRAM, and better execution.

The company now sees revenue around $11.1–$11.3B and EPS $2.78–$2.92, pointing to a healthier memory backdrop as AI servers keep hoovering up high‑bandwidth memory. That’s good read‑through for the DRAM complex.

On the flip side of the AI-hardware chessboard, the administration opened the door to a “light” China path for next‑gen AI chips, but with strings attached and headlines that Nvidia (NVDA | −0.35%) and AMD (AMD | −0.28%) will hand over 15% of China sales tied to export licenses.

Net‑net, that’s policy risk turning into a line item, manageable for the leaders, but not free.

Crypto Pop Helps the Usual Suspects

Coinbase (COIN | +2.92%) and MicroStrategy (MSTR | +1.30%) rode firmer crypto sentiment during Monday’s session, even as Bitcoin wobbled later. In a week like this, anything with beta to risk appetite gets a little extra spark, until CPI says otherwise.

AI Hype Hangover: C3.ai Trips the Wire

C3.ai (AI | −25.58%) cratered after preliminary results missed its own bar, management called them “unacceptable,” which is never the adjective you want on a tape that’s priced for perfection.

When the story is growth‑at‑scale and the numbers don’t scale, the market’s patience is measured in minutes.

Media Shake‑Up: UFC Switches Corners

TKO Group (TKO | +10.23%) inked a seven‑year, $7.7B deal making Paramount+ and CBS the new U.S. home for UFC, a major pivot away from ESPN’s pay‑per‑view model and a big streaming bet by the newly merged Skydance‑Paramount entity.

For TKO, it’s visibility and dollars; for the media landscape, it’s another data point that live sports is the last appointment TV standing.

What I’m Watching Into Tuesday

• CPI internals. A 0.3% m/m core would keep the “slow‑cut” Fed narrative intact. Anything firmer invites a tantrum.

• Semis price action. MU’s guide lift vs. policy headwinds for NVDA/AMD; does memory leadership broaden the rally or just rotate it?

• Positioning vs. price. With 91% of managers calling U.S. stocks overvalued, the tape’s air‑pocket risk is non‑trivial if CPI is hot.

Bottom Line

Markets took a tactical pause ahead of CPI, but the crosscurrents are real: tariffs are a slow burn, memory chips are perking up, and live sports just reminded everyone why distribution scale still matters.

My bias: respect the uptrend, but keep powder dry, a hotter‑than‑consensus core print would probably buy the bears at least a day in the spotlight.

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Kristoff - ChartMill

Next to read: Market Monitor Trends & Breadth Analysis, August 12