Markets brace for inflation data, bank earnings and rising oil prices

Crude jumped to a one-month high as traders confronted a rare three-way market test: June consumer prices due at 8:30 a.m. ET, the first wave of second-quarter bank earnings, and a fresh surge in U.S.-Iran tensions that lifted energy costs. U.S. stock futures were mixed in that premarket stretch, with Brent last up at $86.19 a barrel after President Donald Trump said the United States was reinstating its blockade of Iranian shipping and would charge a 20% fee on cargo moving through the Strait of Hormuz.

The banking sector arrived with plenty of momentum. JPMorgan Chase posted second-quarter net income of $21.2 billion, or $7.70 a share, the highest quarterly profit in its history, and said it ended June with $5.0 trillion in assets and $375 billion in stockholders’ equity. Its release showed revenue of $57.3 billion, investment banking fees up 30% from a year earlier and markets revenue up 35%, while volatile trading conditions and deal activity, including the SpaceX mega IPO, fed the Street side of the business.

Wells Fargo also delivered a stronger quarter, with net income of $6.41 billion, or $2.00 a share, up 17% from a year earlier. Revenue rose to $22.622 billion, driven by $12.317 billion in net interest income and $10.305 billion in noninterest income, while average loans climbed to about $1.0 trillion and average deposits to $1.5 trillion. Wells Fargo’s chief financial officer said consumer trends had been resilient despite volatility in oil prices.

The CPI print will help set the next move in borrowing costs, from mortgages to auto loans and credit cards. The 2-year Treasury yield was already at 4.26%, and markets were pricing roughly a 40% chance of a quarter-point Fed hike at the July 28 to 29 meeting, after hawkish comments from Fed Governor Christopher Waller. Bank shares had already run hard into earnings, with the six-bank basket including JPMorgan, Wells Fargo and Citigroup up 16.23% in the second quarter versus 10.57% for the S&P 500.