US indices hit new records after inflation data

European markets were likewise boosted by the US inflation numbers, with all but Frankfurt rising

Wall Street indices ended at fresh records as US inflation data showed a still-subdued impact from US President Donald Trump’s tariffs.

That, along with Trump extending by 90 days a trade truce with China, cheered investors.

New York jumped after the US consumer price index (CPI) reading for July showed annualized inflation at 2.7%, unchanged from a month earlier.

Both the S&P 500 and Nasdaq ended at fresh records.

European markets were likewise boosted by the US inflation numbers, with all but Frankfurt rising.

While the headline CPI figure was lower than expected, underlying price increases indicated that Trump’s tariffs were nevertheless starting to ripple through the US economy.

Core inflation, which strips out volatile costs such as food and energy, accelerated in July to the fastest pace in six months.

Inflation from tariffs is beginning to feed into the core figure but not yet at the stage that is a major concern for markets, said Lindsay James, investment strategist at Quilter, a wealth management firm.

The dollar slid against major currencies.

Investors calculated that the CPI data was not enough to sway the US Federal Reserve away from an expected interest rate cut next month.

The US central bank, which has an inflation target of 2%, also has to weigh other recent data, including signs in the labour market of slower economic growth.

Katy Stoves, investment manager at Mattioli Woods, warned however: This gentle cooling of the economy will certainly not justify a cut of interest rates to 1% as President Donald Trump is calling for.

Oil prices were lower, after OPEC’s latest growth projections-maintained estimates for 2025.

The oil cartel raised its demand forecast for 2026, signalling it expected stronger global activity next year.

Trump’s announcement on Monday that he would put off reimposing sky-high levies on China to November, to give more time for talks, buoyed market sentiment.

Stock markets in Asia rose on the news, with Tokyo hitting a record.