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August 13, 2026 - 05:57
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(Bloomberg) — Global stocks climbed toward a record and bonds extended gains as a subdued US inflation report eased concerns about an imminent interest-rate hike by the Federal Reserve. Brent snapped a six-day rally.The MSCI All Country World Index, the broadest measure of global equities, rose 0.1% to just shy of its intraday all-time high set last week. The Asia Pacific gauge added almost 1% in a tech-led rally, while futures indicated the rally will build in Europe. Earlier, the S&P 500 closed within touching distance of a record as traders pared bets on a September Fed hike to around 35%.Treasuries rallied across the curve with the yield on rate-sensitive two-year notes dropping two basis points to 4.18%. Bonds in Australia and New Zealand also advanced.Also boosting sentiment toward equities, Brent crude dropped 0.8% to $88.25 a barrel. Gold, which typically benefits when rates aren’t increased, rallied to a two-month high, before paring its advance.Wednesday’s benign US inflation report, coupled with last week’s soft jobs data, gives the Kevin Warsh-led Fed more room to stand pat, easing a key concern for markets as stocks recover from a July selloff in artificial intelligence shares. Still, persistent price pressures and volatile oil markets are complicating the outlook, leaving traders sensitive to incoming economic data.“Appreciable cooling in US core inflation is just the break that the Fed Chair Warsh needed to ‘unpaint’ itself out of the hike corner,” Vishnu Varathan, head of macro research for Asia ex-Japan at Mizuho Bank, wrote in a client note. “The upshot is that this provides critical policy space for the Fed and, in particular for Warsh to re-establish credibility without conceding control over narrative and policy calculus.”US consumer prices rose 0.2% in July from a month earlier, a government report showed Wednesday, in line with economists’ forecasts, while a key underlying inflation measure matched its slowest pace since March 2021.Still, concern about sticky inflation and widening budget deficits have helped keep longer-maturity Treasury yields elevated. Thursday’s 30-year bond sale is expected to price at the highest financing rate in 25 years, after a $42 billion auction of 10-year notes drew the highest yield since 2007.The latest CPI reading and a cooler-than-expected jobs report may keep hawkish Fed officials at bay in September, said Gary Schlossberg, a global strategist at Wells Fargo Investment Institute.“However, we remain guarded on the near-term outlook for inflation amid volatile oil prices tied to the ongoing Middle East conflict along with lingering core price pressures from a strong economy and the AI boom,” he said.What Bloomberg Strategists Say…“Asian investors are returning to a familiar strategy: long Korea, short Hong Kong. That theme was briefly abandoned during the Kospi’s violent July selloff. But August has brought a sharp reversal.”— Mark Cranfield, MLive strategist. For full analysis, click here.The AI trade regained momentum Thursday. South Korea’s Kospi Index rallied 4.2% to enter a technical bull market, with chipmakers Samsung Electronics Co. and SK Hynix Inc. both rallying more than 5%.However, caution lingered as Cisco Systems Inc.’s earnings failed to impress, sending its shares down 4.1% in extended trading. Cerebras Systems Inc. tumbled 17% after sales declined at its hardware business.“The good thing is that we have managed to digest the historical unwind in the momentum trade,” Arun Sai, senior multi-asset strategist at Pictet Asset Management SA, said on Bloomberg Television. “We are in the early innings of the capex buildout. We are going to have a cycle around it. We have digested a fair bit of uncertainty in the AI ecosystem.”Corporate Highlights:Cisco Systems Inc. delivered quarterly revenue and profit that beat estimates, but failed to live up to investors’ high expectations following blow-out results in the previous period. Cerebras Systems Inc. reported a surprising decline in hardware revenue, a sign it’s making inconsistent progress selling computers with a novel chip design. DeepSeek has set up an official social media account and posted job listings for a new team focused on helping develop artificial intelligence agents that can take on services like Anthropic PBC’s popular Claude Code. Tencent Holdings Ltd. more than doubled spending on AI projects and computing to about $7.8 billion last quarter, reflecting the gaming and social media leader’s intensifying efforts to catch up in a critical sphere with rivals like Alibaba Group Holding Ltd. Anthropic PBC is in talks to buy the artificial intelligence startup Decart AI for about $6 billion, according to people familiar with the matter. Some of the main moves in markets:StocksS&P 500 futures were little changed as of 12:49 p.m. Tokyo time Nikkei 225 futures (OSE) rose 1.6% Japan’s Topix rose 0.8% Australia’s S&P/ASX 200 fell 0.5% Hong Kong’s Hang Seng was little changed The Shanghai Composite rose 0.4% Euro Stoxx 50 futures rose 0.4% CurrenciesThe Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1522 The Japanese yen was little changed at 159.45 per dollar The offshore yuan was little changed at 6.7456 per dollar CryptocurrenciesBitcoin was little changed at $63,578.91 Ether was little changed at $1,884.61 BondsThe yield on 10-year Treasuries declined two basis points to 4.67% Japan’s 10-year yield advanced 1.5 basis points to 2.855% Australia’s 10-year yield declined three basis points to 4.99% CommoditiesWest Texas Intermediate crude fell 0.9% to $82.49 a barrel Spot gold was little changed This story was produced with the assistance of Bloomberg Automation.–With assistance from Elaine Lai and Masaki Kondo.©2026 Bloomberg L.P.
