Airline stocks surged following a July Consumer Price Index (CPI) report indicating a 4% month-over-month increase in airfares, marking the first rise in five months and the largest monthly jump since May 2022. Legacy carriers United Airlines, American Airlines, and Delta Air Lines each saw their shares increase by nearly 10%, while JetBlue and Southwest Airlines also experienced gains of 6% and 2.5%, respectively. The rise in airfares contributed to a 3% month-over-month increase in public transportation costs, the largest since May 2022, and supported a 0.3% increase in core inflation in the U.S. services sector in July. This inflationary pressure has heightened market expectations for a Federal Reserve interest rate cut in September, with odds now around 90%.