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July CPI meets expectations, inflation eases: Will the expected cuts be significant?
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Market Overview

U.S. stocks closed mixed with $S&P 500 Index (.SPX.US)$ and $Nasdaq Composite Index (.IXIC.US)$ narrowly holding onto gains, while $Dow Jones Industrial Average (.DJI.US)$ and $Russell 2000 Index (.RUT.US)$ deepened their losses, with small caps dropping nearly 1%, reflecting increased risk aversion. The semiconductor and China ADR indexes outperformed, each rising over 0.6%, with $NVIDIA (NVDA.US)$ leading the gains among the major tech stocks, up more than 4%.

Ahead of key inflation data from the U.S. and U.K., the market is focused on the potential for Iran to launch a significant attack on Israel this week. Rising tensions in the Middle East drove jumps in gold, oil, natural gas, and U.S. Treasuries. Despite OPEC’s rare move to lower global oil demand forecasts for this year and next, WTI crude still rose over 4%, marking its fifth consecutive daily gain, breaking above the psychological $80 mark, and posting its biggest rally and highest level in three weeks. Fears of Russian supply disruptions pushed European natural gas prices to their highest intraday level since early December. Spot gold gained 1.7%, breaking above $2,470. The two-year U.S. Treasury yield dropped 5 basis points, edging closer to the 4% threshold.

The yen briefly fell over 1% against the dollar, resuming its recent downtrend, which helped stabilize the currency market. Offshore yuan fell nearly 150 pips or 0.2%, briefly dipping below 7.18 yuan, hovering near a one-week low. Ethereum surged over 5%.
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