According to the U.S. Bureau of Labor Statistics, inflation surged 8.5% year-over-year in July, lower than the consensus estimates. The stock market rejoiced on the news, with the S&P 500 gaining 2.1% in the last trading session, its highest since May 2022, while the tech-heavy Nasdaq Composite rose 2.9% to 12,854.80, marking its best close since late April.
Consequently, the probability of the Fed hiking rates by 75 bps in September slid to 37%, while the possibility of a 50 bps hike climbed to 63%.
