Wall Street Brunch: Hot CPI Could Re-Ignite Stagflation Fears

Economic Indicators - The upcoming Consumer Price Index (CPI) report is anticipated to show a 0.3% monthly increase, raising the annual rate to 2.9%, with core CPI also expected to rise by 0.3% and remain at 3.1% year-on-year [3] - Wells Fargo economists indicate that core inflation is increasing due to broad-based strength across goods and services, suggesting persistent inflationary pressures [4] - The market has fully priced in a 25 basis points (bps) cut by the Federal Reserve, with a 10% chance of a 50 bps cut, contingent on the CPI results [4] Company Earnings - Kroger is expected to report earnings per share (EPS) of $1 on revenue of $34.13 billion, with bullish analyst sentiment as consumers shift towards value shopping [6] - Grocery sales are projected to increase as more consumers opt to eat at home, with tariffs driving up prices for many products [7] - OpenAI has significantly raised its spending forecast to $115 billion through 2029, with a focus on developing its own data center server chips to manage cloud server rental costs [9][10] Investment Opportunities - Analysts highlight that the AI sector is entering a new growth phase, with significant capital expenditure from Big Tech and expanding enterprise use cases [11] - Recommended AI software stocks include Palantir and MongoDB, while Nvidia and AMD are identified as top chip picks [12]