Japanese Prime Minister Takaichi held a fourth phone call with Iranian President Pezeshkian amid the latest developments in the Middle East.

Core CPI (ex food and energy) rose 0.2% MoM and 2.5% YoY, the weakest YoY gain since Mar 2021. Energy and gasoline fell for a second month; grocery prices declined for the first time since March, partly driven by a record drop in lettuce prices amid a cyclospora outbreak. Housing rent/owners-equivalent rent rose 0.1% MoM and accounted for roughly two-thirds of the headline CPI increase. AI-related price pressure showed in a record 21.2% YoY rise in computer software and accessories; computers, peripherals and smart-home assistants posted their largest gains in over four years. Market reaction: traders trimmed odds of a Fed September rate hike after the release.

SpaceX and Northrop Grumman completed initial critical tests for the Trump-era $185 billion 'Golden Dome' space-based missile-defence program, including sensor-to-interceptor data links and spacecraft propulsion demonstrations, the US Space Force said. The project will enter a next phase to validate operation in the space environment, a Space Force admiral added. In April the Space Force awarded armed-satellite development contracts to 12 firms, including RTX, Anduril and Lockheed Martin; the government has invested $3.2 billion to date and future contract value could reach hundreds of billions of dollars.