EXCLUSIVE: CPI Lands Tomorrow and Could Send PLTR, TSLA Surging—But Only if It's A 'Serious Shock,' Cato Economist Says

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The July Consumer Price Index lands Wednesday at 8:30 a.m. ET, and traders are hoping a soft number can reignite momentum in high-beta names like Palantir Technologies Inc. (NASDAQ: PLTR ) and Tesla Inc. (NASDAQ: TSLA ).

Cato Institute economist Jai Kedia doubts it. "It is unlikely that any meaningful change to those stocks would occur from a singular inflation report," he told Benzinga.

"Markets are already baking in a worse inflation report than June, so only a serious shock in that report would have a sustained stock market effect," Kedia said.

High-beta growth stocks tend to benefit when inflation cools and expectations for higher interest rates fade. A hotter-than-expected CPI can quickly turn that trade the other way.

Economists expect headline CPI to rise 0.1% month over month after June's 0.4% drop, with the annual rate easing to 3.4% from 3.5%. Kalshi traders see limited upside risk, pricing just an 18% chance that annual CPI comes in above 3.4%.

"A one-off jobs or inflation report won't (or at least shouldn't) be a determining factor in rate decisions," Kedia said.

Friday's report, which showed the economy shed 23,000 jobs, pushed markets toward a September pause. Kedia counters that the unemployment rate has barely budged and actually fell to 4.1% last month.