Overview

• July CPI data showed headline inflation at 2.7% year-over-year and core at 3.1%, roughly matching forecasts and pushing market odds for a September Fed rate cut to the mid-90s percent range.
• U.S. stocks surged and short-term Treasury yields fell on the report, with the S&P 500 up 1.1% and the 2-year yield down about 4 basis points, while Asian markets followed the rally and India’s Sensex opened roughly 114 points higher.
• Small-cap stocks extended the advance, driving the Russell 2000 up about 2% to its highest level since December in a broadening market rally.
• President Trump intensified public attacks on Fed Chair Jerome Powell by threatening legal action over Fed building renovations and hinting at his removal, stoking doubts about central-bank independence.
• Nvidia and AMD agreed to pay 15% of revenues from certain lower-powered AI-chip exports to China under U.S. license terms as Beijing urged companies to avoid Nvidia’s H20 processors, adding geopolitical risk.