Global stock markets posted another week of gains as cooler-than-expected US inflation data eased fears of further Federal Reserve tightening, sending major indices hovering near record levels.
The S&P 500 closed at 7,751 on Thursday, up 0.29 percent on the day and posting its third consecutive weekly gain. The Nasdaq Composite added 0.93 percent to 29,799, while the Dow Jones Industrial Average was nearly flat at 53,810. In Europe, the picture was mixed, with most indices holding steady near recent highs despite modest pullbacks.
Cooler Inflation Eases Rate Fear
The catalyst was Wednesday’s US CPI report showing annual inflation at 3.4 percent, with monthly core inflation at just 0.1 percent. The data was soft enough to dramatically reprice the rate outlook: markets now see roughly a 40 percent chance of a Fed rate hike in September, down sharply from 54 percent the previous week.
The Federal Reserve has kept its benchmark rate in the 3.50-3.75 percent range for five consecutive meetings. While some officials, including Cleveland Fed President Beth Hammack, have argued for immediate action to bring inflation down, the softer data has shifted the balance of expectations toward a longer pause.
Tech Leads, Oil Provides Relief
Technology stocks continued to lead the advance, buoyed by strong earnings from artificial intelligence-focused companies. The Philadelphia Stock Exchange semiconductor index has been trading near all-time highs. Meanwhile, crude oil prices offered some relief to markets, with Brent crude trading at 88.88 dollars per barrel and WTI at 83.11 dollars, both slightly lower on the day.
The US 10-year Treasury yield fell to 4.676 percent, down 0.17 percent, reflecting expectations that the Fed will maintain its current stance. A softer dollar provided additional support for emerging-market assets and commodities.
In Latin America, Brazil’s central bank cut the Selic rate to 14.0 percent in early August, its fourth straight cut, offering one of the highest real yields among major economies. The high rate continues to attract foreign capital into local-currency debt even as global uncertainty persists.
Looking ahead, markets will focus on the Producer Price Index release and upcoming retail sales data for further clues on the inflation trajectory. The combination of resilient corporate earnings, easing inflation, and a patient Federal Reserve has created a supportive backdrop for risk assets, though geopolitical risks from the Middle East remain a key wildcard.
Sources: CNBC; Reuters; Rio Times; TradingEconomics; Federal Reserve
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