Inflation Rate Meets Expectations as Markets Await Further Data

The US inflation rate for July broadly met expectations, with headline inflation rising 0.1% month over month and 3.4% year over year. Core CPI increased 0.2% monthly and 2.5% annually.

Markets are awaiting the release of the July producer price index (PPI) on Thursday and retail sales data on Friday, which could provide further insights into the state of the US economy. The inflation report reduced concerns for a near-term hike in interest rates from the Federal Reserve.

The probability of a Fed rate hike in September is down to 40.1% from 54.4% a week earlier, according to data from the CME FedWatch tool. However, economist Peter Schiff disagreed with the lower inflation reading, stating that July's 0.1% CPI rise is 'misleading' due to the way energy prices are calculated.

Tech-related earnings drove mixed moves in the market, with some companies such as CoreWeave Inc. and Ondas Inc. surging after their results, while others like Cisco Systems Inc. and Cerebras Systems Inc. came under pressure.