Stock Markets Rally as US Inflation Cools to 3.4%

US stock markets experienced an uptick on August 12 after receiving a softer inflation report that strengthened hopes of easier monetary policy from the Federal Reserve. The Nasdaq Composite led the charge, while Treasury yields fell across the curve.

The Consumer Price Index (CPI) increased 3.4% year-on-year in July, down from 3.5% in June and in line with expectations. Core CPI, which excludes volatile food and energy prices, rose 2.5% from a year earlier, down from 2.6% in June.

The Nasdaq Composite's gain of 0.4% reflected the sensitivity of technology stocks to interest-rate expectations. The S&P 500's modest 0.2% advance pointed to broader risk appetite across the market, while the Dow Jones index remained close to equilibrium.