Wall Street Lunch: U.S. CPI Holds Steady In February As Fed Eyes Oil Shock, Core PCE

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February CPI meets expectations, but oil shock threatens renewed inflation surge. (0:15) Campbell’s shares slide after it cuts full-year outlook. (1:27) JPMorgan tightens lending against private-credit loans tied to software. (2:32)

This is an abridged transcript of the podcast:

Our top story so far, inflation holds steady, for now.

The February CPI showed modest monthly increases in both the headline and the core, matching expectations.

Annual CPI held at 2.4%, and core CPI stayed at 2.5%.

But the numbers don’t yet reflect the shock from the U.S.–Israel–Iran war, which pushed crude oil above $100 a barrel from about $65 before the action. Oil is currently around $87.

Economist Joseph Brusuelas of RSM sees the CPI topline rising to 3% year over year in March — and 3.5% or more in April.

“That will not provide much comfort to an American central bank now focused like a laser beam on short- and medium-term inflation expectations — and on notice for any bleeding of topline inflation into the core,” he said.

Skyler Weinand, CIO of Regan Capital, says tariff refunds — if they appear — will also juice prices.

The Fed’s attention now turns to the February core PCE price index, out Friday.

Pantheon Macroeconomics notes the CPI components feeding into that gauge were “hot.”

“The jump in prices for computer software will boost the core PCE deflator by 0.08 percentage point alone,” they said.

And bad news for travelers — airfares jumped 7% last month, even before the surge in jet fuel.

Among active stocks, Campbell’s (CPB) is the biggest S&P decliner after it lowered its full-year outlook, reflecting a more cautious view for the balance of the year.

Campbell’s now expects full-year organic sales growth of –1% to –2%, versus its prior –1% to +1% range. Adjusted EPS of $2.15 to $2.25 — midpoint $2.20 — is well below the prior $2.40 to $2.55 outlook and the $2.41 consensus.

Starz Entertainment (STRZ) said its board has adopted a poison pill to stave off hostile takeover attempts.

The rights activate only if a person or group acquires 17.5% or more of the equity. Each right allows shareholders to purchase one share at $93.

The move comes days after media mogul Byron Allen bought a 10.7% stake in the company — a stake previously held by Hollywood producer and former Trump Treasury Secretary Steven Mnuchin.

And Nebius (NBIS) is popping after announcing that Nvidia (NVDA) will invest $2B in the Dutch AI infrastructure provider as part of a strategic partnership to develop the next generation of hyperscale cloud for the AI market.

The partnership will help Nebius deploy more than 5 gigawatts of Nvidia systems by the end of 2030.

And in other news of note, JPMorgan Chase (JPM) has marked down the value of certain loans held by private-credit groups and is tightening its lending to the sector, according to the Financial Times.

The move limits how much the bank will lend against those loans going forward.

The devalued loans are tied to software companies — a sector that’s been in the spotlight in recent weeks.

CEO Jamie Dimon told investors at the bank’s leveraged-finance conference last week that JPMorgan is being more prudent in lending against software assets, the FT said.

A source added the shift was made preemptively to reduce the amount of credit available to the funds. Private-credit executives told the paper they haven’t seen other banks take a similar approach.

And in the Wall Street Research Corner, Wedbush Securities analyst Dan Ives is pushing back against the ongoing software-sector (IGV) selloff, calling it the “most disconnected” technology trade he has seen in 15 to 20 years.

Ives argues that fears of AI disrupting traditional software companies have been overblown — leading to what he calls an “AI ghost trade” that has unfairly punished the group.

“It’s ultimately software — the use cases from Salesforce (CRM) to ServiceNow (NOW) to cybersecurity — that’s gonna protect CrowdStrike (CRWD), Palo Alto Networks (PANW) and others,” Ives said. “I think it’s the most sold off I’ve seen this sector in decades.”