Dollar, Tech, and Energy Stocks Rise Together Amid Softer Inflation

The US dollar and tech shares have been rising alongside energy stocks, despite each sector typically responding to different macroeconomic factors.

This unusual combination starts to make sense when broken down into three separate stories: tech benefiting from softer inflation and strong AI earnings, energy still affected by the disrupted oil market, and the dollar supported by relative US resilience and geopolitical risk.

The Consumer Price Index (CPI) data showed a 0.1% month-on-month increase in July, with an annual rate of 3.4%. This was enough to ease pressure on the Federal Reserve's potential interest rate hike plans, reducing the probability of a September hike to about 36%.

Tech stocks have also received support from AI infrastructure earnings and spending signals, with several names rallying sharply after results. The market is not simply reacting to lower rate expectations but rebuilding confidence in AI infrastructure spending translating into revenue growth.