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U.S. stock indices are gaining to record highs. The US500 is up 0.80% to 6,590 points, the US100 is up 0.70% and surpasses the 24,000-point level, while the small-cap index — US2000 — is up 1.70% to 2,417 points.
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The US30 climbed to an all-time high above 46,000 points, driven by gains in Goldman Sachs, UnitedHealth Group, and Caterpillar.
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Oracle shares are down more than 5% after yesterday’s rally fueled by the OpenAI deal. On the other hand, Micron is up 10% today after Citi raised its price target from $150 to $175.
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After today’s series of U.S. macro reports, the dollar is the weakest G10 currency. The USDIDX dollar index is down 0.28%, while EURUSD is up 0.30%. Among the strongest gainers is the Australian dollar.
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Since the CPI report did not bring any major surprise, the key report today turned out to be jobless claims.
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New jobless claims: 263k vs. 235k expected and 237k prior — the highest reading since October 2021.
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It is the slowing labor market that is now in the spotlight for investors. And it is precisely this data that supports a series of Fed rate cuts starting in September. The market now expects three 25bp cuts at the September, October, and December meetings.
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As expected, CPI inflation for August rose to 2.9% y/y from 2.7% y/y. Core inflation remained elevated at 3.1% y/y. The only surprise was slightly higher monthly CPI, which rose 0.4% m/m versus expectations of 0.3% m/m.
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Markets welcomed the European Central Bank’s decision, which, in line with expectations, left interest rates unchanged. The deposit rate remains at 2%. While the decision itself was not a surprise, comments from President Christine Lagarde drew market attention.
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During the press conference, Lagarde stressed that the disinflation process in the eurozone has stalled, and inflation remains above the ECB’s target. As a result, the bank does not rule out further rate hikes if the inflation situation requires it.
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Investors assume that eurozone rates will remain at current levels for an extended period.
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The inflation outlook for the EU has not changed significantly, although for 2025 and 2026 the forecast was raised by 0.1%. Core CPI is expected at 2.4% in 2025, 1.9% in 2026, and 1.8% in 2027.
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At the same time, GDP growth expectations increased for 2025 (1.2% vs. 0.9%) and 2026 (1% vs. 1.1%), while the forecast for 2027 remained unchanged (1.3%).
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The change in U.S. natural gas inventories according to the EIA came in at 71 bcf vs. 68 bcf expected and 55 bcf previously.
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The price of Bitcoin rose above $114k, while Ethereum gained more than 1.5%. Sentiment in the cryptocurrency market is supported by a weaker dollar and optimism in equities.
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