Recent consumer price index data suggests that American inflation is nearing the Federal Reserve's target of 2%, sparking speculation about potential interest rate cuts. In June 2024, the annual inflation rate dropped to 3%, the lowest since March 2021, with a monthly contraction of 0.1%, the first since May 2020. This news has increased expectations for a Fed rate cut in September, with market-implied odds exceeding 90%. Sectors impacted by high interest rates outperformed the tech sector, as the market reacted to the possibility of reduced borrowing costs. The equal-weight S&P 500 and value stocks performed well, with the real estate sector and the Russell 2000 small-cap index achieving their strongest week of the year. Furthermore, the market saw a rare dynamic with the Russell 2000 surging while the Russell 1000 fell, hinting at potential market shifts. Pfizer's advancements in a weight-loss pill and tech stocks hitting 52-week highs also influenced market sentiment.