🐺 CPI Came In Clean. Oil Says It Doesn't Matter.

CPI came in exactly where Wall Street expected. In any normal week, that would be a green light. This is not a normal week.

S&P 500 closed at 6,751 (-0.44%). Nasdaq roughly flat. Oil climbed to $91. Gold hit $3,280. Bitcoin slid to $69,760. The 10Y is at 4.15%.

CPI › February inflation printed +2.4% year over year, in line with expectations. On any other day, this would be a relief rally. The problem: this data is already stale. Oil has surged 35% in two weeks and is sitting above $91 right now. Goldman sent a note Sunday saying every $10 increase in oil, sustained for three months, adds roughly 0.4% to headline CPI. So February's number is clean. March's won't be. PPI drops tomorrow morning, and that's the next chance to see whether the oil shock is bleeding into producer costs yet.

WAR › Trump told Axios today: "War with Iran will end soon, practically nothing left to target." Earlier this week he said it "could be over soon." The market wants to believe that, but Iran is reportedly laying mines in the Strait of Hormuz, which is the opposite of de-escalation. The IEA proposed the largest oil reserve release in its history (400 million barrels). Japan and Germany are both releasing national reserves. The global response tells you how seriously governments are taking the supply disruption, regardless of the timeline Trump gives.

EARNINGS › Oracle ($ORCL) jumped 9.47% after reporting. The EPS technically missed ($1.79 vs $1.96 est), but nobody cared. Cloud revenue hit $8.9B. Remaining performance obligations surged to $553 billion, up 325% year over year. AI demand commentary was the strongest Oracle has ever delivered, and the market rewarded the growth visibility over the earnings gap. That's the pattern to watch: in this tape, forward demand matters more than backward numbers.

AI › Nvidia invested $2 billion into Nebius ($NBIS) and Jensen Huang said at GTC that "AI is at another inflection point." He described AI as a "five layer cake": energy, chips, infrastructure, models, applications. Meanwhile, Meta agreed to acquire Moltbook (the AI agent platform). The AI buildout keeps getting capital behind it even while the broader market sells off.

OPTIONS › The biggest flow of the day was $189.9 million in Tesla ($TSLA) puts at the $500 strike expiring March 20. Multiple large Microsoft ($MSFT) put blocks also printed. That's nearly $200M in downside protection from institutional desks in a single session. When that much hedging premium hits the tape on a day CPI came in clean, it tells you the smart money isn't convinced the coast is clear.

The CPI print looked fine. +2.4% year over year, right in line. The market barely reacted, which was the correct response, because the number is already outdated.

Here's the math. This CPI reading captures data through the end of February. Oil averaged roughly $68-72 for most of February before spiking in the final days of the month. The real oil shock (WTI going from $70 to $91) happened almost entirely in March. That means the energy pass-through from the Iran war isn't in today's number at all. It'll show up in the March and April prints.

Goldman's note from Sunday spelled it out: every $10 sustained increase in oil adds about 0.4% to headline CPI over three months. Oil is up roughly $20 from pre-war levels. If it stays here, that's potentially 0.8% getting added to CPI by the time the April and May prints come out. That would push headline inflation from 2.4% back toward 3%+, which kills the rate cut story.

The IEA proposing a 400 million barrel reserve release is the countervailing force. Japan and Germany are releasing reserves too. If those releases bring oil back below $80, the inflation pass-through fades. If the Strait of Hormuz stays contested and oil pushes past $100, none of the reserve releases will matter enough.

So what do you actually do? Tomorrow's PPI is the next signal. It's a faster indicator of producer cost pressure than CPI. If PPI comes in hot, expect the 10Y to push toward 4.25% and growth stocks to take another leg down. If PPI is cool, the market gets a temporary reprieve.

The honest positioning: stay lighter than usual in rate-sensitive names, keep some energy exposure as a natural hedge, and don't over-allocate based on one backward-looking CPI print. The inflation picture won't be clear until April at the earliest.

Oracle's $553B in remaining performance obligations (up 325% YoY) is the kind of number that changes how you model the entire cloud/AI infrastructure trade. If you want to see how Oracle stacks up against the rest of the AI supply chain, the data is on Rallies.

See the full breakdown on Rallies →

Thanks for reading! Catch you in the next one!

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