This content was published on
August 12, 2026 - 22:44
5 minutes
(Bloomberg) — Stocks rose to a striking distance of a record after the latest inflation report matched expectations, easing concerns about imminent Federal Reserve rate increases.The data brought some relief to Wall Street traders worried about geopolitical risks, with the S&P 500 extending its August advance. A rally in giant chipmakers also helped sentiment, driving the Nasdaq 100 to a one-month high. Short-dated Treasuries outperformed. Money markets are pricing in less than a 50% chance of a September Fed hike. US crude settled around $83.The consumer price index, excluding often-volatile food and energy categories, rose 0.2% in July from a month earlier. On an annual basis, it advanced 2.5%, matching the slowest pace since March 2021.In the wake of Friday’s weak jobs report, the moderation in price growth may help alleviate some of the inflation anxiety at the Fed after three officials dissented on July 29 in favor of raising rates.“The big surprise with a report that had no surprises is that a situation where inflation isn’t reaccelerating, coupled with the most recent, weak jobs report gives the Fed more time to wait,” said Chris Zaccarelli at Northlight Asset Management.Typically, the market would be buoyed by the thought of rate cuts, but in a world where many are expecting rate increases, anything that can delay or squash the need for hikes will be viewed positively, he added.There will be another round of inflation data before the September Fed meeting, but unless those numbers tell a much different story, officials will likely still be in a position to leave rates unchanged, said Ellen Zentner at Morgan Stanley Wealth Management.While prices remain elevated, the latest CPI should give investors greater confidence that peak inflation appears to be behind us, according to Bret Kenwell at eToro. However, a more serious threat would be oil topping $100 again and forcing a more aggressive Fed response, he added.“With the Strait of Hormuz still shut, upside inflation risks will remain top of mind for the foreseeable future,” said Seema Shah at Principal Asset Management.Inflation running above the Fed’s target and swelling budget deficits have contributed to elevated long-dated yields. Thursday’s 30-year Treasury sale is expected to take place at the highest financing rate in a quarter of a century. That’s after a $42 billion auction of 10-year bonds resulted in the highest yield for the securities since 2007.Corporate Highlights:Cisco Systems Inc. gave a sales projection for the current quarter that far exceeded Wall Street’s expectations, a sign of success for the company’s efforts to supply a larger share of the AI data center market with its networking gear. Cerebras Systems Inc. reported a surprising decline in hardware revenue, a sign it’s making inconsistent progress selling computers with a novel chip design. Super Micro Computer Inc. gave a revenue forecast for the current quarter that topped analysts’ estimates, a sign the booming artificial-intelligence market continues to bolster sales of the company’s servers. CoreWeave Inc., a provider of computing that powers AI systems, topped analysts’ estimates for second-quarter sales after signing up more customers. Nebius Group NV reported a 514% jump in second-quarter sales for its cloud business following strong demand for AI computing power. What Bloomberg strategists say…“While wage growth remains a challenge, it’s also because the labor market has been softening. Coupled with data indicating some modest progress on the inflation front, it should be enough to keep front-end yields capped until more visibility on the rate path emerges.”—Tatiana Darie, Macro Strategist, Markets Live. For the full analysis, click here.Some of the main moves in markets:StocksThe S&P 500 rose 0.3% as of 4 p.m. New York time The Nasdaq 100 rose 0.7% The Dow Jones Industrial Average was little changed The MSCI World Index rose 0.2% CurrenciesThe Bloomberg Dollar Spot Index rose 0.1% The euro fell 0.2% to $1.1523 The British pound fell 0.1% to $1.3492 The Japanese yen fell 0.1% to 159.49 per dollar CryptocurrenciesBitcoin fell 0.4% to $63,436.51 Ether was little changed at $1,879.57 BondsThe yield on 10-year Treasuries was little changed at 4.69% Germany’s 10-year yield was little changed at 3.16% Britain’s 10-year yield was little changed at 4.97% The yield on 2-year Treasuries declined one basis point to 4.20% The yield on 30-year Treasuries advanced one basis point to 5.25% CommoditiesWest Texas Intermediate crude fell 0.3% to $82.92 a barrel Spot gold rose 1% to $4,412.22 an ounce ©2026 Bloomberg L.P.
