U.S. stocks and bonds stabilize as August inflation eases below expectations
August inflation came in lower than economists forecast, easing bond market pressure and allowing U.S. equities to hold steady.
August inflation in the United States increased 3.4% from a year earlier, below the 3.7% consensus estimate, according to the latest government report. The softer reading helped lower the 10-year Treasury yield to roughly 5.24% from 5.26% the day before, tempering the sharp rise that had taken yields to their highest level since 2002. Reduced yields eased pressure on equity markets, with the S&P 500 edging up 0.3%, the Dow gaining about 78 points (0.2%), and the Nasdaq climbing 0.4% in early trading.
Short-term yields fell further as traders reassessed the odds of a Federal Reserve rate hike next month, now seen as unlikely. The market also absorbed higher oil prices, as Brent crude rose 2.7% amid uncertainty over the Iran conflict. International indices showed mixed moves, with Japan’s one outlet up 1.9% and France’s CAC 40 down 0.6%.
Why it matters
Easier inflation data reduces bond pressure and supports stocks, shaping investor sentiment and Fed policy expectations.
How this story developed
- Sep 20 Oil prices tick up after Houthi missile and drone strike on Riyadh
- Sep 24 Iran’s president publicly rejected any surrender to the United States at the UN.
- Sep 28 Asian equity markets opened with restraint on Monday as oil prices surged amid lingering US-Iran tensions, while higher bond yields added pressure.
- Sep 28 Oil prices spiked sharply, pushing bond yields higher and prompting mixed moves in Asian equities.
- Sep 29 Trump turned down Iran’s peace proposal at the United Nations.
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