Stock Market Rises to Record as Inflation Slows, Interest Rates Fall
U.S. stocks climbed to all-time highs Thursday and Friday after inflation reports showed cooling price pressures. The S&P 500 jumped 0.65 percent to close at a record 7,798.99, while the Nasdaq composite gained 0.8 percent. Wholesale inflation flatlined in July on a monthly basis, with the annual producer price index falling to 4.7 percent from 5.8 percent in June. Consumer prices also cooled, with headline inflation at 3.4 percent year-over-year, matching expectations. The data sparked optimism that the Federal Reserve might hold interest rates steady through the end of 2026, potentially avoiding the rate hikes that markets had previously expected. Treasury yields fell across the board, with the 10-year yield dropping to 4.65 percent from 4.68 percent. While inflation remains above the Fed's 2 percent target, economists noted that energy-driven price pressures appear to be easing. Some Federal Reserve officials, however, have argued rates should rise to combat stubborn inflation.
Key facts
- S&P 500 closed at record high of 7,798.99, up 0.65 percent
- Nasdaq composite index gained 0.8 percent
- Producer Price Index flat monthly in July, down to 4.7 percent annualized from 5.8 percent in June
- Consumer Price Index at 3.4 percent year-over-year, down from 3.5 percent in June
- Core PCE expected to ease to 3.2 percent year-over-year in July, per Citigroup
- Federal funds futures pricing in 60 percent probability Fed keeps rates at 3.50-3.75 percent at September meeting
- Treasury 10-year yield fell to 4.65 percent from 4.68 percent
- Three Federal Reserve presidents dissented in July, favoring a 0.25 percent rate hike
- Oil prices eased 2.1 percent to 87.07 dollars per barrel of Brent crude
How different outlets framed it
Right-leaning coverage: Conservative and Trump-aligned officials have argued that elevated inflation remains problematic and that interest rates should be raised immediately to bring prices back to target, with some citing the need to act now before inflation becomes entrenched in expectations. This view contrasts with market relief over lower rate odds.
Limits of this briefing
Left-leaning perspectives on wage impacts or worker concerns were not prominently featured in recent market coverage. The story reflects market consensus rather than broader debate about inflation's effects on different income groups or the trade-offs between price stability and employment.
Sources
- NBC News: Stocks rise and interest rates slide after inflation report Centre
- CNBC: S&P 500 closes at a new record, buoyed by cooler-than-expected inflation data Centre
- Northwest Arkansas Democrat-Gazette: Stocks rise to all time high as inflation, oil prices ease Centre
- CNN Business: Fed officials warn not raising interest rates was a mistake Centre
- U.S. House Ways and Means Committee: Fed's Persistently High Interest Rates Are Unjustified and Harming America's Economy Right