Ali Canberk Ozbugutu and Emir Yildirim
13 August 2026•Update: 13 August 2026
Moderate US inflation data supported risk appetite in global markets but the lack of clear statements from the US and Iran over a new ceasefire in the Middle East limited the optimism.
The US’ consumer price index (CPI) rose 0.1% month-on-month and 3.4% on an annual basis last month, within estimates.
The energy price decline pace slowed compared to the previous month but the downward trend continued, while the annual inflation fell to its lowest in the past four months and core inflation hit its lowest since February at 2.5% year-on-year.
Analysts say the slowing inflation trend pushed back expectations for Fed rate hikes.
The Fed’s likelihood to hike rates in September fell below 50% and it weakened for a rate hike by year-end, money market estimates showed.
The US consumer inflation could continue to slow due to falling energy costs as long as steps towards peace in the Middle East gain momentum and geopolitical risks in the Strait of Hormuz ease. The release of the US Producer Price Index (PPI) on Thursday could bolster market volatility.
US, Iran extend ceasefire
Meanwhile, Pakistan said the US and Iran had allegedly agreed to extend the 60-day ceasefire under the Islamabad Agreement, set to expire Aug. 17.
Pakistani government sources told Anadolu that the parties conveyed their approval of the extension to mediators, while the talks over the duration of the ceasefire extension beyond the Islamabad deal’s expiry date were ongoing.
US President Donald Trump recently said Washington has full control over the Strait of Hormuz. He also claimed the Iranian media is lying about the ongoing situation in the region, and that the “300%” inflation in the country is getting even worse.
In response, Tehran said the Strait of Hormuz will not be reopened until their conditions are met.
AI driving rise in tech stock
Oil prices and US Treasury yields somewhat pulled back following these developments, while corporate financial results showed strong demand for artificial intelligence (AI), driving the rise in tech stocks.
Cloud computing firm CoreWeave’s shares gained 19.3% after its second-quarter revenue nearly doubled.
Supermicro shares surged 19.02% following financial results exceeding expectations. Shares of other AI related tech firms also gained, with Nvidia shares rising 3%, Micron Technology 4.9%, and Oracle 5.4%.
The US 10-Year Treasury yield fell two basis points to 4.68% but the lack of clarity in the Middle East and uncertainties over the Fed’s interest rate path drove the US Dollar Index to extend its rally into the third consecutive trading day, rising 0.1% to 99.9 and briefly exceeding the 100 threshold on Wednesday, while trading up 0.1% at the 100 level on Thursday.
Gold fell 0.3% to $4,394 per ounce as the US dollar strengthened and bonds remained high, while October-delivery Brent crude prices declined 0.3% to $88.7 a barrel.
The S&P 500 climbed 0.26% and the Nasdaq rose 0.54%, while the Dow Jones Industrial Average traded flat on Wednesday. American indexes opened Thursday mixed.
European stock markets
The complicated situation in the Middle East, escalating tensions between Russia and Ukraine, and high energy costs led to a selloff in European stock markets, except for Italy.
Germany’s annual inflation rose to 2.8% in July due to rising energy prices.
The European Central Bank (ECB) is likely to hike rates in September with an 80% probability due to inflation concerns in the region.
Rising Russia-Ukraine tensions in the Black Sea boosted risk perception in the markets, as the Ukrainian Security Service (SBU) said two Russian frigates and one patrol boat were attacked on Russia’s Novorossiysk naval base.
Russian Foreign Ministry spokesperson Maria Zakharova said Ukraine’s attacks in the Azov and the Black Sea were disrupting agricultural exports and threatening global food security.
The UK's FTSE 100 fell 0.1%, France's CAC 40 dropped 0.46%, and Germany's DAX 40 was down 0.23%, while Italy's FTSE MIB 30 traded flat on Wednesday. European indexes opened Thursday on a positive note.
Asian markets show buying trend
At the same time, Asian equity markets showed a buying trend amid moderate US inflation and softening hawkish expectations over the Fed’s monetary policy.
Japan’s PPI came in below estimates at 0.1% on a monthly basis and 7.2% year-on-year. Despite the annual PPI falling short of expectations, it accelerated versus the previous month.
Tokyo is seeking to amplify the impact of its recent currency intervention, which may support a rate hike by the Bank of Japan (BoJ).
The BoJ is expected with a 75% probability to hike its policy rate by 25 basis points next month.
Near Thursday’s close, Japan’s Nikkei 225 climbed 1.6%, South Korea’s Kospi rose 4%, China's Shanghai Composite increased 0.5%, and Hong Kong's Hang Seng was up 0.1%.
