U.S. Inflation & Rate-Cut Expectations

The U.S. consumer price index (CPI) for July came in at 2.7%, slightly below forecasts, sparking optimism across markets as investor expectations of rate cuts strengthened.

The S&P 500, Nasdaq, and Dow Jones surged, with markets pricing in a 92% probability of the Fed cutting interest rates by 25 basis points in September—a notable increase from 80%. This paved the way for further rate-cut speculation later in the year.