Overview
- U.S. consumer prices rose 0.1% in July and annual CPI eased to about 3.4%, a release that matched forecasts and reduced immediate urgency for Fed tightening.
- The Bureau of Labor Statistics reported July producer prices were unchanged, a Thursday reading that reinforced the view that price pressures are moderating and helped push stocks higher while Treasury yields fell.
- Money markets trimmed the probability of a September 25 basis-point Fed hike to roughly 40%, according to CME FedWatch, as investors priced in a higher chance the Fed will hold at its next meeting.
- Equities drew support from strong AI-related earnings and capital spending expectations even as the dollar largely steadied and bond moves retraced some early post-CPI swings.
- Oil prices stayed elevated because U.S.-Iran talks over the Strait of Hormuz showed no breakthrough, a dynamic that keeps an upside risk to headline inflation and places focus on weekly jobless claims and core PCE on August 26.