Key Takeaways

• Commodity prices have declined from recent highs.
• Inflation expectations have subsided somewhat as well.
• Stocks will likely continue to reflect inflation risks over the near term

There may not be many positive catalysts to drive the market higher over the short term—especially while several more interest rate hikes appear likely down the road—but I do think there's some emerging good news: Inflation may have peaked.

Commodity Prices Retreat

Most commodity prices have started to put the brakes on recently. The Bloomberg Commodities Index—which tracks more than 20 commodity futures including energy, metals, and livestock—has declined 19% since this year's most recent high reached on June 9 (see Commodity prices have broadly declined in recent weeks chart below).

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