FX.co ★ US Stocks Rise as Traders Welcome CPI

On Tuesday, U.S. stocks experienced an uptick, with the three primary indices each gaining approximately 0.5%. This positive movement came in response to the latest Consumer Price Index (CPI) report, which strengthened the outlook for a potential Federal Reserve rate reduction next month. The annual headline inflation rate remained steady at 2.7% in July, slightly under the anticipated 2.8%, while core inflation rose more than expected to 3.1%. These statistics suggest that the impact of tariffs on pricing pressures continues to be minimal, potentially enabling the Federal Reserve to implement a 25 basis points cut in September. The likelihood of a rate cut, formerly at 88% yesterday, has now increased to nearly 93%. Investor confidence also received a boost following President Trump's decision to prolong the suspension of significant tariffs on Chinese imports for an additional 90 days, up to November 10, matched by Beijing’s corresponding extension. All market sectors were in positive territory, with communication services leading gains, while the energy sector lagged behind. In corporate news, Intel saw an increase of 1.1% after President Trump expressed praise for CEO Lip-Bu Tan, following prior criticisms. Meta appreciated by 2.5%, and Circle surged by over 10%, driven by strong growth in second-quarter revenue.