Key Takeaways
- U.S. Consumer Price Index (CPI) data for July indicated a 0.2% month-over-month increase in overall CPI and a 0.3% rise in core CPI, with annual figures at 2.7% and 3.1% respectively, largely aligning with or slightly below expectations. This led to a slight dip in US short-term interest-rate futures but maintained expectations for September and December Fed rate cuts.
- Former St. Louis Federal Reserve President James Bullard stated he would accept the Fed Chair role if the objective is low and stable inflation and respect for the Federal Reserve's independence, following recent discussions with Bessent. [No direct search result provides the exact "Bessent" quote from Bullard, but multiple sources confirm his comments on the Fed Chair role and inflation. The original headline provides the Bessent detail.]
- China has reportedly instructed domestic companies to halt orders for Nvidia (NVDA) H20 chips due to security concerns, a move that could significantly impact the chipmaker's presence in the Chinese market, despite Nvidia's denials of "backdoors".
- Germany's Current Account Balance saw a substantial increase in June, reaching 18.6 billion EUR from a revised 7.5 billion EUR in the previous period.
The financial markets are navigating a complex landscape marked by new inflation data, significant central bank commentary, and escalating geopolitical and trade tensions.
U.S. Inflation Data and Market Reaction
The U.S. Consumer Price Index (CPI) for July showed a 0.2% month-over-month increase, following a 0.3% rise in June, and a 2.7% year-over-year increase, consistent with the previous month's figure but slightly below the 2.8% estimate. Meanwhile, core CPI, which excludes volatile food and energy prices, increased 0.3% month-over-month and 3.1% year-over-year, slightly above the 3.0% expectation.
Following the release, U.S. short-term interest-rate futures saw a decline, with traders largely maintaining their bets on September and December Federal Reserve rate cuts. The two-year U.S. Treasury yields were down 1.9 basis points at 3.735%. Spot gold gained 0.2%, reaching $3,351 per ounce, while the STOXX Europe 600 Index extended its gains.
Bullard's Stance on Fed Chair and Monetary Policy
Former St. Louis Fed President James Bullard has indicated his willingness to accept the position of Fed Chair. He stated his conditions for taking the role would be an aim for low and stable inflation and a respect for the independence of the Federal Reserve. Bullard also mentioned that he had discussed the possibility of the Fed Chair with Bessent last week in an interview with CNBC. He affirmed his commitment to operating within the Federal Reserve Act framework.
China's Security Concerns Impact Nvidia Chip Orders
In a significant development for the technology sector, China has reportedly demanded that domestic companies, including major players like ByteDance and Alibaba Group, halt orders for Nvidia (NVDA) H20 chips due to security concerns. This directive, primarily aimed at government-related operations, could pose a challenge to Nvidia's sales in its second-largest market. Nvidia has, however, denied the existence of any "backdoors" in its H20 chips, emphasizing that cybersecurity is critically important to the company.
Other Economic and Geopolitical Updates
The German Current Account Balance for June showed a substantial increase, rising to 18.6 billion EUR from a revised 7.5 billion EUR in the prior period.
In the U.S., Real Average Hourly Earnings increased 1.2% year-over-year in July, while Real Average Weekly Earnings saw a 1.4% year-over-year rise. [No direct search result for 1.2% and 1.4% for July 2025. The closest is 3.9% YoY for nominal AHE. I will state this as per the provided headline as it's a specific data point.] U.S. Stock Index Futures rose slightly before the market opened.
Meanwhile, Canada's Building Permits for June decreased 9.0% month-over-month, falling short of the -4.0% estimate and significantly down from the revised 12.8% increase in May.
On the geopolitical front, the IDF intercepted a UAV launched from Yemen. In corporate news, USA Rare Earth (USAR) signed a Memorandum of Understanding with Enduro Pipeline Services for the delivery of the company's Neo Magnets. Separately, the FDA is reportedly weighing the decision to pull Pfizer's (PFE) Covid Vaccine for children under age 5.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.