Stocks remained volatile in light summer trading, as investors absorbed inflation data and the start of Q2 earnings season. On Thursday morning, the S&P 500 Index hit its lowest intraday level since June 22 but rallied sharply on Friday in response to a new round of bank earnings and promising economic data. Energy stocks underperformed as oil prices fell to levels not seen since before Russia’s invasion of Ukraine. On Wednesday, US inflation data came in hotter than expected, sending markets sharply lower. The US CPI rose by 9.1% yoy in June, the highest increase since 1981. Investors’ fears moderated on Friday as the University of Michigan’s preliminary survey of consumer sentiment showed that Americans’ 5-year inflation expectations had declined sharply in early July to 2.8%, their lowest level in over a year. Market expectations for the July FOMC meeting pulled back to +75 basis points rather than the +100 basis points futures markets had begun to indicate. The yield on the US 10-year fell over the week, as an inversion in the 2-year/10-year segment of the Treasury yield curve reached its widest level since 2000. In Europe, stocks gained after three consecutive months of losses. However, the advance was restrained by worries that an energy shortage might cause a recession in Europe. Chinese stocks eased as rising coronavirus cases and elevated geopolitical tensions hurt sentiment. The Dollar Index rallied for the 6th week in the last 7, closing at its highest since 2002. Cryptocurrencies rallied as well as Bitcoin tested $21k.