Markets Jump On Cooling Inflation Data

American indices continued their rise, boosted by July inflation figures coming in below forecasts. This macroeconomic signal has propelled expectations of a Federal Reserve rate cut as early as September, now almost certain in investors’ eyes. Driven by this momentum, optimism also spreads to the crypto market and Asian tech giants, creating a global movement where macroeconomics, traditional finance, and DeFi advance together.

In brief

• American indices rise after July inflation figures fall below expectations.
• Investors now almost unanimously anticipate a Fed rate cut as early as September.
• The bond market relaxes, with 10-year and 30-year yields significantly down.
• Chinese tech giants jump, boosted by a calmer trade climate and prospects of lower US rates.

Wall Street Driven by Anticipation of a Monetary Shift

While many investors believe that a further drop in inflation could boost Bitcoin more, American indices opened higher Wednesday morning following the July Consumer Price Index (CPI) report. Although inflation slightly increased, it remained below forecasts, strengthening the hypothesis of rapid monetary easing. Weakness signals from the labor market reinforce the monetary policy easing scenario. Key highlights at session opening included:
• The Dow Jones: +0.84% at 44,830.33 points
• The S&P 500: +0.4%
• The Nasdaq Composite: +0.31% at 21,748.34 points
• The probability of a rate cut in September: nearly 100% (CME Group)
• The 10-year yield: 4.25%
• The 30-year yield: 4.84%
• The most dynamic sectors: consumer discretionary (+0.7%) and technology (+0.6%)
This bond market easing reflects a rapid adjustment of rate expectations and strengthens the appetite for credit-sensitive stocks. Investors seem to be positioning for an environment where the cost of capital would be lower, potentially boosting profits of cyclical and tech companies.

Crypto, IPO, and Asian Markets in Turmoil

Beyond the American Wall Street indices, the news was marked by the IPO of Bullish, the operator of a crypto platform and owner of CoinDesk. Priced at $37 per share, above the anticipated range, the IPO values the company at $5.41 billion and enables it to raise $1.1 billion. This success contrasts with its aborted 2021 attempt via a SPAC. More broadly, the crypto market benefits from a favorable US political environment and renewed institutional interest, illustrated by the growth of various altcoins. Asian markets also benefited from this supportive context. Tencent jumped 4.7% after announcing revenue growth above expectations (+15%), while Alibaba and JD.com gained 3.6% and 2%, respectively. The easing of trade tensions between Beijing and Washington and hopes for more accommodative monetary policy in the United States fuel this movement. The VIX, a volatility index, fell to 14.49, its lowest level since December 2024, confirming investor confidence, or complacency. Between positive macroeconomic signals, monetary easing expected in September as anticipated by Goldman Sachs, and catalysts specific to the crypto and tech sectors, markets evolve in a marked optimistic climate. However, upcoming releases, notably the Producer Price Index and retail sales, could reshape this scenario.

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Frequently Asked Questions (FAQ)

Inflation and Rate Cuts

Q: What economic data prompted the market rally? A: The market rally was primarily driven by the July inflation figures, which came in lower than forecasted. Q: What is the expected impact of cooling inflation on the Federal Reserve's policy? A: Cooling inflation is increasing investor expectations for a Federal Reserve rate cut, with a cut as early as September now considered almost certain. Q: How have bond yields reacted to the inflation data? A: Bond yields have relaxed significantly, with notable drops in the 10-year and 30-year yields.

Market Performance

Q: Which markets benefited from the positive economic news? A: American indices, the crypto market, and Asian tech giants all saw gains due to the positive macroeconomic signals and the prospect of lower US interest rates. Q: What specific Asian tech companies saw significant gains? A: Tencent jumped 4.7%, Alibaba gained 3.6%, and JD.com rose 2%, boosted by a calmer trade climate and the prospect of lower US rates.

Crypto Market Impact

Q: How is the crypto market being influenced by these macroeconomic trends? A: The crypto market is benefiting from the overall optimistic climate, with expectations of monetary easing and renewed institutional interest contributing to growth.

IPO Market Activity

Q: What significant IPO occurred recently in the crypto-related sector? A: Bullish, the operator of a crypto platform and owner of CoinDesk, had a successful IPO, pricing shares above the anticipated range and raising $1.1 billion.

Crypto Market AI's Take

The recent market movements, fueled by cooling inflation and the anticipation of Federal Reserve rate cuts, highlight the interconnectedness of traditional finance and the digital asset space. As interest rates potentially decrease, capital becomes more accessible, often flowing into riskier assets like cryptocurrencies. This trend aligns with our platform's focus on leveraging AI for sophisticated market analysis and identifying opportunities across both traditional and digital asset classes. The positive sentiment extending to Asian tech giants further underscores a global economic recovery narrative, which typically benefits the broader crypto market as well. Our AI-powered tools continuously monitor these macroeconomic shifts to provide actionable insights for our users.

More to Read:

• What are AI Trading Bots and How Do They Work?
• Understanding Cryptocurrency and its Market Dynamics
• The Impact of Monetary Policy on Crypto Prices

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Originally published at Cointribune on Wed, 13 Aug 2025 18:05:00 GMT