Airline stocks rallied Tuesday after July's inflation report showed ticket prices jumping while gasoline costs — a key industry expense — dropped sharply. This gave carriers a rare double boost.
- JETS ETF is moving fast. Check the chart here.
Airline fares jumped 4% from June, while gasoline prices dropped 1.9% over the month and are now 9% lower than a year ago.
The dual move means carriers can charge more while paying less for one of their biggest operating costs, a setup that sent airline shares sharply higher.
By late morning in New York, Alaska Air Group Inc. (NYSE:ALK), American Airlines Group Inc. (NASDAQ:AAL), Delta Air Lines Inc. (NYSE:DAL) and United Airlines Holdings Inc. (NASDAQ:UAL) were each up between 7% and 8%.
The U.S. Global JETS ETF (NYSE:JETS) — a key benchmark for the industry — soared 5.7%, the largest gain in over a month and the third biggest since October 2022.
The Dow Jones Transportation Index jumped 2.8%, outpacing the broader market's gains and eyeing its best performance since May.
What's Getting Cheaper, What's Getting More Expensive
The CPI report showed mixed news for U.S. consumers. While gasoline provided relief at the pump, several everyday expenses moved higher.
A notable price jump was recorded in transportation services, which climbed 0.8% for the month and remain 3.5% higher than a year ago.
Medical care services also accelerated, rising 0.8% in July and 4.3% year-over-year, with dental services and hospital care driving much of the increase.
Used car prices rose 0.5% in the month and 4.8% from last year. Transportation services increased 0.8% month-over-month and are up 3.5% compared to the same period last year.
Gasoline prices fell by 1.9%, or 9% on an annual basis, helping to contain headline inflation. Meanwhile, energy services posted a 0.3% monthly decline, though their annual gain remains steep at 7.2%, led by utility gas service's 13.8% jump from July 2024.
Grocery prices, classified as "food at home,” were flat in July but still 2.9% higher than last year, while dining out — "food away from home" — rose 0.3% in the month and is up 3.9% over the past year.
Shelter costs — the largest component of CPI — were up 0.2% for the month and 3.7% over the year.
| Category | MoM Change (Jul 2025) | YoY Change (Jul 2025) |
|---|---|---|
| All Items | +0.2% | +2.7% |
| Food | 0.0% | +2.9% |
| Food at Home | -0.1% | +2.2% |
| Food Away from Home | +0.3% | +3.9% |
| Energy | -1.1% | -2.2% |
| Energy Commodities | -1.6% | -9.0% |
| Gasoline (All Types) | -1.9% | -9.5% |
| Fuel Oil | +1.8% | -2.9% |
| Energy Services | -0.3% | +7.2% |
| Electricity | -0.1% | +5.5% |
| Utility (Piped) Gas Service | -0.9% | +13.8% |
| All Items Less Food & Energy | +0.3% | +3.1% |
| Commodities Less Food & Energy | +0.2% | +1.2% |
| New Vehicles | 0.0% | +0.4% |
| Used Cars & Trucks | +0.5% | +4.8% |
| Apparel | +0.1% | -0.2% |
| Medical Care Commodities | +0.1% | +0.1% |
| Services Less Energy Services | +0.4% | +3.6% |
| Shelter | +0.2% | +3.7% |
| Transportation Services | +0.8% | +3.5% |
| Medical Care Services | +0.8% | +4.3% |
Market Reactions: Investors Flock Into Transportation Stocks, Healthcare Giants
The travel-related rally spilled over into cruise lines, with Carnival Corp. (NYSE:CCL) up 2.7%, Royal Caribbean Group (NYSE:RCL) gaining 2.2% and Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) rising 1.6%.
Shipping and logistics stocks climbed too, with Old Dominion Freight Line Inc. (NASDAQ:ODFL) up 3.8% and FedEx Corp. (NYSE:FDX) adding 3.3%. Uber Technologies Inc. (NYSE:UBER) rose 1.7%.
Healthcare stocks benefited from the uptick in medical costs, with UnitedHealth Group Inc. (NYSE:UNH) up 3.7%.
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