Airline Stocks Surge Amid Inflation Report, JETS ETF Hits Highest Gain Since October

Airline stocks surged after July's inflation report showed ticket prices jumping 4% while gasoline costs dropped 9% YoY. The dual move benefits carriers, allowing them to charge more while paying less for a key expense. Alaska Air Group, American Airlines, Delta Air Lines, and United Airlines rose between 7% and 8%, while the US Global JETS ETF soared 5.7%. The Dow Jones Transportation Index jumped 2.8%, outpacing the broader market.

Airline stocks surged on Tuesday following the release of July's inflation report, which showed a significant increase in ticket prices while gasoline costs dropped sharply. This dual move provided a rare boost to carriers, allowing them to charge more while reducing a key operating expense. Major airlines such as Alaska Air Group, American Airlines, Delta Air Lines, and United Airlines saw their stocks rise between 7% and 8%, while the U.S. Global JETS ETF soared by 5.7%, marking its third-biggest daily gain since 2022. The Dow Jones Transportation Index also jumped 2.8%, outperforming the broader market.

The inflation report revealed that airline fares jumped 4% from June, while gasoline prices dropped 1.9% over the month and are now 9% lower than a year ago. This combination of higher ticket prices and reduced gasoline costs created a favorable environment for airlines, as they can pass on higher ticket prices to consumers while experiencing lower fuel costs. By late morning in New York, Alaska Air Group Inc. (ALK), American Airlines Group Inc. (AAL), Delta Air Lines Inc. (DAL), and United Airlines Holdings Inc. (UAL) were each up between 7% and 8% [1].

The U.S. Global JETS ETF (JETS) soared 5.7%, the largest gain in over a month and the third biggest since October 2022. The Dow Jones Transportation Index also climbed 2.8%, outpacing the broader market's gains and eyeing its best performance since May. The travel-related rally spilled over into cruise lines, with Carnival Corp. (CCL) up 2.7%, Royal Caribbean Group (RCL) gaining 2.2%, and Norwegian Cruise Line Holdings Ltd. (NCLH) rising 1.6%. Shipping and logistics stocks climbed as well, with Old Dominion Freight Line Inc. (ODFL) up 3.8% and FedEx Corp. (FDX) adding 3.3%. Uber Technologies Inc. (UBER) rose 1.7%, while healthcare stocks benefited from the uptick in medical costs, with UnitedHealth Group Inc. (UNH) up 3.7% [1].

The inflation report showed mixed news for U.S. consumers. While gasoline provided relief at the pump, several everyday expenses moved higher. Transportation services climbed 0.8% for the month and are up 3.5% compared to the same period last year. Medical care services also accelerated, rising 0.8% in July and 4.3% year-over-year. Used car prices rose 0.5% in the month and 4.8% from 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 [1].

References:
[1] https://www.benzinga.com/markets/equities/25/08/47065403/july-inflation-report-airline-fares-stocks-transportation-dow-jones
[2] https://site.financialmodelingprep.com/market-news/alaska-air-group-q2-2025-earnings-overview