Global equity markets in Asia, Europe, and the U.S. rallied strongly after the latest U.S. inflation reading came in lower than anticipated, reinforcing expectations of a Federal Reserve rate cut in September. Key Asian benchmarks, including Japan’s Topix, reached record highs, while European indices like the Stoxx Europe 600 and Germany’s DAX also posted healthy gains.
In the U.S., inflation held steady at 2.7%, below forecasts, prompting futures markets to assign a 96% probability to a quarter-point rate cut by the Fed. This eased investor concerns, leading to notable advances in the S&P 500 and Nasdaq, as well as gains in tech and semiconductor sectors—especially following an extension of the U.S.–China trade truce.