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Cooling U.S. Inflation Lifts Stocks as Oil Rises on Middle East Tensions

Cooling U.S. inflation has lowered the market’s odds of a September Fed rate increase.

Overview

  • U.S. consumer prices moderated in July, a slowdown that markets interpreted as reducing the chance of a Federal Reserve rate hike in September and helping equity buying confidence.
  • The S&P 500 reached a fresh record and closed the week higher for a third straight week even though trading turned mixed on Friday after weaker U.S. retail sales and some profit taking.
  • Crude oil rose more than 4% over the week because ceasefire talks in the Middle East stalled and U.S. officials signaled tougher measures toward Iran, a shift that raises near‑term inflation risk.
  • Technology showed sharp divergence as Applied Materials plunged after its quarterly report and guidance while South Korea’s Samsung and SK Hynix rallied, lifting the Kospi.
  • Regional markets diverged with Spain reporting July inflation at 3.6%, Mexico’s BMV finishing the week weaker, and Argentina’s Merval under pressure, all underscoring how local factors and currency dynamics shape responses to global cues.