In-Line July CPI Lifts Stocks as Rate Hike Bets Fade

Wall Street rallied on August 12 after the Bureau of Labor Statistics reported that the Consumer Price Index for All Urban Consumers rose 0.1 percent in July on a seasonally adjusted basis, following a 0.4 percent decline in June. The year-over-year rate eased slightly to 3.4 percent from 3.5 percent in June, landing in line with expectations and prompting traders to scale back bets on further Federal Reserve rate hikes. In early trading, the Dow Jones Industrial Average gained 0.2 percent to 53,872, the S&P 500 rose 0.4 percent to 7,756, and the Nasdaq Composite jumped 0.7 percent to 26,641, with Nasdaq 100 futures surging roughly 1 percent shortly after the 8:30 a.m.

Eastern release. AI and chip stocks led the advance. The report offered some relief to markets, though inflation at 3.4 percent annually remains above the pace of wage growth, keeping pressure on consumers and leaving the Fed's path forward uncertain.