Stocks Rise as Softer Inflation Eases Rate Hike Fears
US stocks rose on Friday after inflation data came in softer than expected, causing markets to ease their concerns about a potential interest rate hike from the Federal Reserve.
The US Consumer Price Index (CPI) for July increased by just 0.1%, matching analyst predictions and reducing worries that the Fed would need to raise rates soon to combat rising inflation.
However, oil prices took a different turn, dipping to $88.68 per barrel as investors weighed softer demand forecasts against ongoing tensions in the Strait of Hormuz, which could lead to disruptions in global energy supplies.
Schroders, a global asset manager, warned that even if tensions ease, shipping through the strait may remain below full capacity, keeping oil prices high and potentially driving up inflation through higher gasoline and utility bills in the long term.