US July CPI rose 0.1% month-over-month, putting the annual rate at 3.4% — exactly matching the Dow Jones consensus estimate. The S&P 500 gained 0.30%, the Nasdaq climbed 0.59%, and the Dow advanced 0.11% on Wednesday. Core CPI, stripping food and energy, rose 0.2% on the month and 3.1% year-over-year. The read removes any near-term Fed tightening risk.
1
CPI breakdown
Shelter inflation rose 0.3% m/m — its lowest reading since January 2025, signaling the long-delayed rental market convergence is finally arriving. Gasoline fell 2.4% m/m, driven by the Iran naval blockade and IEA strategic reserve release. Food at home was flat. Services ex-shelter rose 0.15%.
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Fed rate path
Fed funds futures price a 72% probability of no September cut — unchanged from pre-report. The data removes the tail risk of a surprise hike without triggering cut expectations. Powell speaks at the Kansas City Fed symposium August 28, which is the next major policy signal to watch.
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Sector moves
Tech sector led gains at +0.81% as disinflation reduces rate risk on long-duration growth stocks. Energy fell 1.3% as gasoline deflation hit E&P earnings estimates. Homebuilders rose 1.7% on the shelter print. 10-year Treasury yield fell 5 basis points to 4.42%. The VIX closed at 17.2 — a six-week low.
3.4% annual CPI keeps the Fed comfortably on hold. August 28 Jackson Hole is the next rate-signal window.
Sources
- ✓ Yahoo Finance — Stock market today: S&P 500 climbs on cooler inflation — 2026-08-12
- ✓ TheStreet — Stock Market Today Aug 12 2026: S&P 500 climbs after CPI — 2026-08-12
- ✓ CNBC — S&P 500 closes higher after tame consumer inflation report — 2026-08-12
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