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2mo ago

July CPI Supports Fed Rate Cut Odds as Stocks Hit Record Highs

Tempered headline inflation alongside a core uptick has fueled equity gains with heightened focus on upcoming economic data

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The unemployment rate remained at 4.7 per cent
Euro 2024, in which England progressed to the final, provided a boost to Entain last year but the group said this year’s performance was even better

Overview

  • The Labor Department reported July headline CPI rose 2.7% year-over-year and 0.2% month-over-month while core inflation accelerated to about 3.1% annually.
  • The S&P 500 and Nasdaq closed at record highs as investors welcomed in-line headline inflation and eased U.S.-China trade tensions.
  • Interest rate futures and LSEG/CME data show traders pricing roughly a 90–98% probability of a 25 basis point Fed rate cut at the September meeting.
  • The White House extended its 90-day tariff pause with China and a Reuters report said major chipmakers agreed to allocate about 15% of advanced chip sales to the U.S. government as a revenue levy.
  • Market attention now shifts to upcoming Producer Price Index and retail sales releases for confirmation of price trends before the Fed convenes on September 17.