Inflation cooled. Oil caught fire.

Yesterday delivered the benign CPI the market wanted, and the reaction was textbook — modest equity gains, lower yields, the cut path intact. But the relief is narrower than it looks. The in-line print keeps the Fed divided, with any hike unlikely to land before year-end, and the disinflation it confirms is a July snapshot — taken before oil’s latest surge. Brent’s roughly 12% six-session climb toward $88, driven by a hardening Hormuz deadlock, is the more important developing story: if it holds, it will begin to feed producer and then consumer prices, complicating the very rate-cut path the market just celebrated. Today’s PPI is the first place that energy pressure could show.

• Equities edged up — the tame CPI and steady AI earnings lifted the tape, with the Nasdaq leading a modest advance.
• Yields fell — Treasuries rallied across the curve as the in-line print kept the rate-cut path open.
• Oil stole the show — Brent’s six-session surge toward $88 lifted energy and reframed the inflation debate.

Equity figures are Wednesday 12 Aug’s close; rates, FX and commodity levels are the latest available and approximate. Single names appear as news, not recommendations. Times GST.

For weeks the Gulf story was one of easing — oil drifting lower, revenue pressure lifting, a reopening seemingly within reach. This week reversed it. Iran’s foreign minister said Tehran and Oman were close on a framework but that the Strait of Hormuz would not reopen until Washington eases sanctions and pays war reparations — terms the US is unlikely to accept quickly. With the deadlock hardening, Brent has climbed about 12% in six sessions toward $88, and the EIA has lifted its price outlook, assuming strait constraints persist through August with some disruption lingering well into next year. For the Gulf’s producers the higher price is a partial offset to lower volumes; for importers across the region it raises the energy-cost and inflation risk again. The waterway normally carries about a fifth of the world’s seaborne oil, so the market is right to watch each headline closely.

Vault Wealth’s house view: the surge vindicates the restored energy and gold hedge we have carried through the de-escalation head-fake, and that hedge is now doing its job. We stay balanced and disciplined: no chasing the oil move, no adding equity risk on the CPI relief until the energy picture settles. A move toward or through $90 Brent, or a further hardening of terms, would take us more defensive; a credible return to negotiation would let us trim the hedge and re-engage.