Inflation gives the market a boost... Electricity prices are still an issue... A headwind for the AI build-out... In case you missed today's event...
Inflation eased in June...
Yesterday, the Bureau of Labor Statistics' consumer price index ("CPI") showed the largest month-over-month decline in headline inflation since the COVID-19 pandemic, thanks to declining energy prices.
Core CPI, which excludes energy and food prices, rose 2.6% year over year – within touching distance of the post-COVID low of 2.5%. That's even better news than the drop in headline inflation because core CPI doesn't care about the spike (and recent decline) in oil from the on-again, off-again conflict with Iran.
Markets finished higher yesterday on the news.
Today, the producer price index ("PPI") gave investors more reason to cheer. In June, the PPI fell 0.3% from May. Core PPI rose 0.2%. Both of those numbers were below Wall Street's estimates.
On a year-over-year basis, the PPI rose 5.5%. While that's still high compared with the last three years, it's a sharp drop from the 6.5% increase in May.
The PPI measures wholesale inflation – meaning what businesses pay for products before selling them to consumers. So it's seen as a precursor to consumer inflation. If businesses see the prices they pay rise, they'll likely pass those hikes on to consumers to maintain their margins.
The elevated PPI could still pose problems for consumer inflation in the coming months. That's especially true if energy prices pick back up again with the Iran conflict restarting.
Still, all investors cared about today was the lighter-than-expected data for June. That helped push stocks up today, with all three major U.S. indexes finishing higher.
There is one place inflation is still going strong, though...
While energy prices fell month-over-month, the electricity component of the CPI rose 4% year over year in June. That's higher than the broader inflation reading of 3.5%.
Over the past five years, electricity prices have jumped more than 37%. Once again, that's outpacing headline inflation, which has "only" risen about 23% over the same period. AI is a big reason why.
As we wrote in the February 18 Digest...
When OpenAI's ChatGPT launched the AI boom back in November 2022, data centers only made up about 4% of total power demand in the U.S.
But since then, their energy share has increased substantially – hitting 7%, according to analysts at Goldman Sachs.
The trend will only continue from here.
At the end of 2024, the Department of Energy projected that data centers could make up anywhere from 6.7% to 12% of total power demand by 2028.
Here we are, only about a year after that projection, and data centers in the U.S. are already in that range – two years sooner than expected.
Those numbers are even higher in places with a high concentration of data centers, like Virginia, where they account for about 25% of all electricity demand.
The Electric Power Research Institute estimates that data centers' share of Virginia's electricity demand could rise to between 39% and 57% by 2030.
All of these data centers are putting the power grid under more and more stress. In its recent supply auction for 2028/2029, PJM Interconnection (the country's largest power-grid operator) said that pledged supply from utilities came up 6,500 megawatts ("MW") short of the requirement.
While that doesn't mean the grid is destined to fail, it raises the risk that it won't be able to meet demand. From PJM's release...
Such a shortage does not necessarily mean that the PJM system will be unable to serve load reliably in the delivery year; it means that PJM would have to operate with slimmer reserves and greater level of risk.
That's only going to get worse as more data centers come on line – pushing prices higher as demand outpaces supply.
Data-center opposition is rising...
According to a recent survey from Morning Consult, about 45% of respondents want the U.S. to stop building data centers. On the other hand, about 35% of respondents said that they'd like to see more data centers.
This is the first time that more folks are opposing data centers than supporting them. And lawmakers are listening...
While several town and county governments have already placed bans on data centers, New York just became the first state to put a moratorium on data-center construction. Yesterday, New York Governor Kathy Hochul signed a law placing a one-year ban on data center projects using more than 50 MW of energy.
According to data-center project tracker Cleanview, there are only two operational data centers in New York that match or exceed that cap. But of the 25 planned projects in the state, at least nine would exceed the 50 MW limit.
Lawmakers from 14 other states have also proposed bans on data-center construction, including data-center hotbed Virginia.
Only time will tell if these proposals become law. But data-center opposition is growing from both individuals and lawmakers... and it could throw a wrench in the AI boom.
Data-center construction is already slowing down...
Back in January, we wrote about how data-center-project cancellations and delays were growing. That trend has continued...
According to Morgan Stanley, around $156 billion of data center projects were either canceled or delayed in 2025. In the first quarter of 2026, the number exploded to $130 billion.
A separate analysis from investment firm Bernstein showed that it will take 12 years to get the current planned data-center backlog up and running, up from 10 years just last month.
That's a problem.
Collectively, hyperscalers like Amazon (AMZN), Alphabet (GOOGL), Meta Platforms (META), Microsoft (MSFT), and Oracle (ORCL) are investing around $1 trillion per year in their AI goals. But if they can't get their data centers up and running, they won't generate a return on that heavy investment. All the chips and components these companies are buying would sit idle.
If continued opposition and bans on data-center construction keep extending the timeline to get these massive projects on line, the hyperscalers are either going to have to pull back on their investments or sit on heavy losses until they can see a return.
In either scenario, investors would likely punish the stocks. It's just another crack in the AI boom.
In case you missed today's event...
Over the past few weeks, we've talked about how investors are rotating away from certain areas (like Big Tech) and into others (like healthcare and small-cap stocks).
As MarketWise CEO and Retirement Trader editor Dr. David "Doc" Eifrig explained in a brand-new, free presentation this morning, that rotation happens in individual stocks, too.
That's why Doc has developed a dynamic stock-predicting system that tracks recurring patterns in the market.
This system pinpoints specific entry points for stocks and sectors and made more than 18,000 successful predictions over an extensive 10-year back test. This includes delivering a 1,600%-plus gain on Nvidia (NVDA) in back testing.
Folks can get a full breakdown of Doc's brand-new system in his presentation here. Just for watching, you'll learn the name and ticker of Doc's No. 1 stock recommendation absolutely free.
And, for Doc's existing Retirement Trader and Stansberry Alliance members, you are welcome to watch, but you have complete access to this system already. Your access went live yesterday here.
New 52-week highs (as of 7/14/26): Altius Minerals (ALS.TO), Alpha Architect 1-3 Month Box Fund (BOXX), GCM Grosvenor (GCMG), Marathon Petroleum (MPC), Cloudflare (NET), Okta (OKTA), Pembina Pipeline (PBA), and Valero Energy (VLO).
A quiet mailbag today, as we've reached that time of year when reader feedback tends to slow down a bit for the summer. But the inbox remains open, and we're always happy to hear from you. Send your notes to feedback@stansberryresearch.com.
All the best,
Nick Koziol
Baltimore, Maryland
July 15, 2026
