Global equities climbed to new highs as cooling U.S. producer price data led investors to reduce expectations for a Federal Reserve interest rate hike in September.

Key Points

• The S&P 500 reached an intraday record high, driven by strong performance in the technology sector.
• Traders now price in a 65% probability that the Federal Reserve will maintain current interest rates next month.
• U.S. producer prices remained unchanged in July, following a consumer price report that showed a 3.4% annual increase.
• Brent crude futures fell 2.15% to $87.07 per barrel following reports of rising U.S. inventories and lowered global demand forecasts.
• OPEC reduced its oil demand growth forecast for 2026, contributing to the decline in energy prices.

Why it Matters

The shift in interest rate expectations provides a more favorable environment for risky assets like tech stocks by reducing borrowing cost concerns. This market optimism, coupled with robust AI infrastructure earnings, suggests investors remain confident in continued economic growth despite ongoing geopolitical tensions and energy market volatility.