US consumer prices increased by 0.1% in July 2026, matching expectations and reassuring markets about inflation trends. Glenn Yin, director of research at ACCM, said, "The CPI print was reassuring, but not soft enough to change the Fed's outlook materially. It reduces the urgency for another hike, but with inflation still above target, the Fed can afford to stay patient" [1]. Following the report, markets trimmed the odds of the Federal Reserve hiking interest rates in September to about 40%, down from 54% a week earlier [1, 2]. Currency markets held steady, with the US Dollar index near 100 and the dollar-yen pair trading around 159-160 after recent coordinated intervention by US and Japan authorities [1, 2].
Oil prices remained elevated near two-week highs around $90 per barrel despite forecasts of lower demand. Tensions in the Middle East, including unresolved negotiations between Iran and Oman on reopening the Strait of Hormuz, kept prices supported. Tom Hainlin, investment strategist at U.S. Bank Wealth Management, noted, "The Iran conflict factor continues to push or pull risk appetite; energy markets and oil prices are directly affected. Markets still see a risk premium reflected in prices" [3, 4].
US stock markets showed mixed to weak performance on August 10 and 11. The semiconductor sector declined sharply, led by a 2.94% drop in the Philadelphia Semiconductor Index amid concerns over capital raising. Intel announced plans to raise $15 billion in new stock issuance to fund its AI business expansion, with some reports suggesting the amount may rise to $20 billion. Intel shares fell sharply following the announcement [3, 4, 5, 6]. Meanwhile, Nvidia's stock gained after unveiling new open-source AI models including Nemotron 4, a 1 trillion parameter model, and launching Nemotron 3.5 Lightning [3, 5, 6]. Meta CEO Mark Zuckerberg publicly opposed concentration of powerful AI in few hands and released AI model parameters to build trust, stating, "We oppose letting powerful AI remain concentrated in the hands of a few corporations and governments; sharing AI model parameters is key to regaining trust" [3].
In Asia, Taiwan's stock market surged over 700 points on August 10, driven by gains in tech and AI-related stocks despite geopolitical and US market pressures. TSMC reported record July revenue of NT$467.58 billion, up 5.6% from June and 44.7% year-on-year, fueled by strong demand for advanced chips [7, 8, 9].
Investors remain cautious amid inflation above target and ongoing geopolitical risks. Volatility persists across currencies, stocks, and commodities as markets weigh Federal Reserve policy direction and geopolitical uncertainties [1, 4, 7].
The next key event will be the Federal Reserve's September meeting, where policymakers will decide whether to pause or raise interest rates amid persistent inflation and shifting market expectations.
