July CPI Data Lowers Expectations for September Rate Hike

The Bureau of Labor Statistics reported that the consumer price index rose 0.1% in July, bringing the annual inflation rate to 3.4%. Core CPI, which excludes food and energy, increased 0.2% monthly and 2.5% annually, marking the slowest annual pace since March 2021. These figures aligned with Dow Jones consensus forecasts and suggest that energy-price shocks from the Iran war are fading, although shelter costs, medical care, and airfares continue to drive inflation.

Following the report, stock market futures rose and Treasury yields declined. Traders lowered the probability of a September interest rate hike to 42%, shifting expectations toward potential moves in October or December. The Federal Open Market Committee is expected to review another month of data before its September 15-16 meeting to determine whether to maintain current rates or implement a hike.

In other business news, AI cloud provider CoreWeave shares rose 14% in extended trading following strong financial results and new deals with Meta Platforms and Anthropic. Meanwhile, e-commerce startup Phia was suspended from the Impact.com marketplace following allegations that co-founders Phoebe Gates and Sophia Kianni used "cookie stuffing" to inflate revenues and claim commissions from retailers including Nike, Gap, and Nordstrom.