Global Markets Rally as Inflation Cools and Bank Profits Beat Estimates

The U.S. Consumer Price Index climbed 3.5% for the year ending in June, a figure that fell short of market expectations. This deceleration was largely tied to a dip in gasoline prices, which tracked with a fragile ceasefire between Washington and Tehran. While oil prices initially spiked, they later moderated after President Trump abandoned plans for a transit fee in the Strait of Hormuz, pivoting instead toward new investment talks with Gulf nations.

Financial institutions provided the primary engine for the day’s gains, as bank shares rallied on earnings reports that comfortably outpaced Wall Street forecasts. This momentum did not extend to the entire technology sector, however, as IBM shares stumbled. The dollar softened in response to the inflation cooling, while Treasury yields faced a period of volatility as initial anxieties in the bond market began to dissipate. Tensions remain high in the region, with Iran maintaining its claim over the waterway and the U.S. conducting fresh strikes following a missile attack on one of its military bases.