July Inflation Data and Market Reactions
The July Consumer Price Index (CPI) rose by 0.1%, matching economist expectations, with annual inflation at 3.4%, down from 3.5% in June. Core CPI, excluding food and energy, increased by 0.2% monthly and 2.5% year-over-year. The monthly rise in shelter accounted for about two-thirds of the increase, while gasoline prices declined by 2.9% for the second consecutive month.
Following the report, major indexes opened positively but gave back gains, with the Nasdaq Composite up 0.44%, the S&P 500 adding 0.23%, and the Dow Jones Industrial Average increasing 0.09% as of 12:16 p.m. ET. Notably, Micron Technology’s stock rose 6.5% and SK Hynix gained 7.2% due to forecasts of increased demand for AI memory chips, despite mixed sentiments about overall chip supply.
Market analysts are now estimating about a 40% chance of a Federal Reserve rate hike in September. Recent data, including a job loss of 23,000 in July and upward revisions to earlier months, suggest a possible shift in monetary policy focus.
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