The Nasdaq (+1.39%) and S&P 500 (+1.14%) indices achieved new highs, reaching 21,668.90 and 6,445.76 points, respectively. The Dow Jones Industrial Average rose by 1.10%.
“The market is breathing a sigh of relief” since the release of the Consumer Price Index (CPI), noted Angelo Kourkafas from Edward Jones, adding “the feared tariff impact was less apparent in July’s numbers than in June’s.”
Last month, the CPI rose at the same pace as in June (+2.7% year-on-year), tempered by a decrease in oil prices (-9.5% year-on-year).
Throughout the month, the index slowed to +0.2% after +0.3% in June, aligning with analysts’ expectations according to MarketWatch’s consensus forecasts.
This report “reinforces the idea that tariffs have not yet caused significant inflation” for Americans, stated Jose Torres from Interactive Brokers.
As a result, “nothing seems to prevent the Fed from cutting interest rates in September” during the next monetary policy meeting, argued Angelo Kourkafas.
This view is widely shared among analysts, most of whom believe the U.S. central bank will reduce key rates by 0.25 percentage points at the end of the summer (in the northern hemisphere).
While several closely watched economic data points, such as Producer Price Inflation (PPI) and retail sales, are yet to be released this week, “today’s CPI is really the kind of key data investors were waiting for to confirm or refute these rate cut expectations,” assured Kourkafas.
The U.S. market is also optimistic about the 90-day extension of the trade truce between Washington and Beijing.
In the bond market, the yield on 10-year U.S. government bonds remained stable compared to the previous day, at 4.28%.
On the stock exchange, the American semiconductor and processor company Intel (up 6.62%, to $21.81) benefited from a meeting between the group’s new CEO, Lip-Bu Tan, and U.S. President Donald Trump at the White House on Monday.
“It was very interesting,” stated Trump on his social network Truth Social, also praising the “incredible success” and rise of Intel’s CEO, a few days after calling for Tan’s resignation and raising suspicions about alleged ties to China.
Circle, the creator of the USDC cryptocurrency, saw increased demand (up 1.27%, to $163.21) after reporting higher-than-expected revenue.
