Global Equities Surge as Softer Inflation Report Calms Market Jitters

On Tuesday, equity markets across the globe posted impressive gains after fresh U.S. inflation figures hinted that price pressures remain under control despite ongoing trade disputes. July’s Consumer Price Index showed a 2.7% year-over-year increase, just shy of the 2.8% economists had projected. While core inflation rose at its fastest pace since January, the slightly softer headline figure reassured investors that tariffs have not yet stoked a dangerous inflationary spiral.
The response in U.S. markets was immediate. The S&P 500 and Nasdaq 100 opened roughly 0.7% higher, setting a positive tone for the trading session. Bond markets joined the rally: the benchmark 10-year Treasury yield slipped about 4 basis points to 4.269%, and the two-year note fell 2 basis points to 3.73%. These moves reinforced the view that the Federal Reserve could move toward rate cuts before year-end.
International markets mirrored the upbeat sentiment. Japan’s Nikkei surged to record levels, driven by strong performances in the technology sector, while Chinese shares advanced on renewed optimism about trade stability. In Europe, gains were broad-based, with exporters and industrials leading the charge.
Fueling the rally was the announcement that the U.S. and China had agreed to extend their tariff ceasefire by another 90 days, postponing any immediate escalation in duties. This diplomatic reprieve added to the sense that the worst-case trade scenarios might be avoided for now.
The improved risk mood spilled into currency markets. The dollar weakened against most major currencies, while emerging-market units benefited from the shift toward risk-on positioning.
In commodities, oil prices edged higher as traders balanced optimism over demand against lingering supply uncertainties. Gold prices stayed steady, supported by the dip in the dollar.
Looking ahead, market focus is expected to pivot toward upcoming economic data releases and comments from central bank officials. For now, the combination of encouraging inflation figures and reduced trade tensions has given global equities a much-needed lift, potentially setting the stage for continued strength into the next quarter.