CPI and Jobs Report Fail to Spark Market Volatility
The Consumer Price Index (CPI) for July came in at 3.4%, matching consensus and down from June's 3.5%. Core CPI, which excludes food and energy prices, eased to 2.5% - its slowest annual pace since March 2021.
The jobs report released earlier had already priced in most of this data, with a negative headline print showing the US economy shed 23,000 positions in July. This moved CME FedWatch's projection of a September rate hike down to the high-30s to low-40s from the 63% to 70% range.
However, not all members of the Federal Reserve were on board with this view. Three regional bank presidents dissented in favor of an immediate rate hike at the July 29 FOMC meeting, citing elevated energy prices and years of above-target inflation.
AI earnings reports from companies like Nebius Group and CoreWeave may have also contributed to a stable market, as their core AI cloud business revenue rose nearly sixfold year-over-year. This has kept investor attention focused on AI infrastructure spending rather than BLS data points.