U.S. Stocks Close Higher as CPI Cools, Gold and Silver Rally, Oil Extends Gains, Yen Nears 160

Market Overview

Risk appetite improved overnight as U.S. inflation data came in broadly in line with market expectations. Headline CPI for July eased to 3.4% YoY, while core CPI slowed to 2.5% YoY, reinforcing expectations that inflation continues to moderate.

U.S. equities closed modestly higher, led by technology and semiconductor stocks. The S&P 500 gained 0.26% to 7,748.50, the Nasdaq Composite rose 0.54% to 26,588.49, while the Dow Jones Industrial Average slipped 0.04% to 53,770.27.

Safe-haven assets and commodities also advanced. Spot gold climbed 0.86% to reclaim the $4,408/oz level, while silver rose 1.02% to $65.322/oz. Crude oil extended its rally amid ongoing supply tightness, with WTI crude gaining 1.30% to hold above $83.20/bbl, and Brent crude rising 1.36% to $88.91/bbl.

In the bond market, the U.S. Treasury's 10-year note auction cleared at a 4.683% high yield, the highest since 2007. The stronger yield environment supported the U.S. dollar, while the Japanese yen weakened to 159.48 per dollar, approaching the psychologically important 160 level.

Asian equities also posted broad gains. China's Shanghai Composite rose 0.32%, the Shenzhen Component Index gained 1.09%, and the ChiNext Index advanced 1.49%.

Key Market ThemesU.S. July PPI to Provide Further Inflation Clues

With CPI data largely matching expectations, investor attention now shifts to the release of the July Producer Price Index (PPI).

As a leading gauge of upstream inflation pressures, another moderate PPI reading would reinforce the narrative that inflation is gradually cooling. However, an upside surprise could revive concerns over persistent price pressures, potentially pushing longer-term Treasury yields and the U.S. dollar higher.

Markets will also closely monitor the latest Initial Jobless Claims, which should provide additional insight into whether the U.S. labor market is gradually softening or remains resilient.

Fed Speakers in Focus Ahead of the September Meeting

Investors will be watching remarks from Cleveland Fed President Beth Hammack and Richmond Fed President Thomas Barkin for further clues on the inflation outlook and the Federal Reserve's policy trajectory.

Markets currently assign roughly a 45% probability to a policy move at the September FOMC meeting, reflecting continued uncertainty over the Fed's next step. Combined with the highest 10-year Treasury auction yield since 2007, any hawkish or dovish signals from Fed officials could amplify volatility across interest rate and foreign exchange markets.

What to Watch

• U.S. July Producer Price Index (PPI)

• U.S. Initial Jobless Claims

• U.K. Q2 Gross Domestic Product (GDP)

• JD.com Earnings Release

• SanDisk Investor Day

• Speeches by Cleveland Fed President Beth Hammack and Richmond Fed President Thomas Barkin

• U.S. 13F Institutional Holdings Filings