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2w ago

U.S. Stocks Soar as Soft Headline CPI and Trade Truce Push Fed Cut Odds Higher

July’s 2.7% inflation reading, coupled with the tariff truce extension, has boosted traders’ expectations for a September rate cut; upcoming PPI and jobs reports will test the durability of those bets.

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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 that headline CPI rose 0.2% in July to 2.7% year-over-year while core inflation accelerated to 3.1%, signaling sticky underlying price pressures.
  • Market-implied odds of a September Federal Reserve rate cut jumped to around 90% as Treasury yields fell and the S&P 500 closed at fresh record highs.
  • President Trump’s executive order extended the 90-day pause on higher U.S. tariffs on Chinese imports, easing immediate trade uncertainty for investors.
  • Economists warn that higher duties are beginning to ripple through consumer prices, contributing to faster core inflation and complicating policymakers’ decisions.
  • Investors now await this week’s Producer Price Index, retail-sales figures and the August jobs report to determine whether the Fed will follow through on its rate-cut pricing.