Asian Stocks Rise as US Inflation Data Dents Rate Hike Bets

Asian stocks rose on Thursday as investors shifted their attention back to the Iran war after softer-than-expected U.S. inflation data reinforced expectations that the Federal Reserve will keep rates unchanged next month.

Oil prices dropped 2% to $87.30, outweighed by lower demand signals and the ongoing stalemate in peace negotiations over Iran. The Organization of the Petroleum Exporting Countries lowered its world oil demand growth forecast for 2026.

Traders scaled back their bets on a September rate hike, pricing in a 65% probability of the Fed staying on hold next month versus 50% before the release of the latest economic data and inflation figures.