Global Markets Rally as US Inflation Data Cools Rate Hike Fears

The cooling inflation report suggests that underlying price pressures may be stabilizing, a development that pushed Asian equities upward. South Korea’s KOSPI surged 6 percent, while Japan’s Nikkei 225 gained 1 percent. Despite this optimism, Federal Reserve Chair Kevin Warsh cautioned that a single month of data is insufficient to declare a victory over inflation, tempering expectations of an immediate policy pivot.

Corporate performance remains a primary driver of volatility, particularly within the semiconductor sector. Dutch equipment giant ASML beat revenue expectations, signaling robust demand for AI infrastructure, even as IBM’s weaker guidance highlighted a growing divide between AI winners and laggards. Simultaneously, energy markets found a moment of stability near 86 dollars per barrel after President Donald Trump abandoned a proposed 20 percent transit fee for vessels in the Strait of Hormuz. While this eased immediate concerns, investors remain wary of the broader geopolitical friction between the United States and Iran.

Economic headwinds persist elsewhere, with China reporting 4.3 percent year-on-year growth for the second quarter, falling short of targets due to sluggish domestic demand. As markets await earnings from firms like Morgan Stanley and BlackRock, the focus remains on whether these gains can hold against the backdrop of ongoing military tensions and the selective nature of the current technology rally.