Inflation behaved. Markets exhaled.

July's US consumer price index landed exactly where forecasters expected. That sounds like a non-event, and it is precisely why it moved every market on the board.

Traders had spent a fortnight braced for a hot inflation number — the kind that would force the Federal Reserve to raise interest rates again. It didn't arrive. Money markets now put the chance of a September rate rise at less than 50%, down from better-than-even odds going in.

The S&P 500 closed within touching distance of a record. A rally in the large chipmakers pushed the Nasdaq 100 to a one-month high. Short-dated government bonds outperformed, with the two-year Treasury yield falling to 4.17%.

Why this matters to you. Interest rates are the gravity acting on every share price. When rates rise, money a company will pay you in ten years is worth less today — so prices fall, hardest for fast-growing companies whose profits sit furthest in the future. Yesterday nothing changed at any company. What changed was the discount applied to all of them.

Company news

Lock-upSpaceX faces its first share unlockSPCX

The first tranche of insider shares becomes sellable today, two months after June's flotation — over 900 million shares. The stock fell more than 13% on Wednesday after a sharp rise in planned capital spending, and Daiwa cut its target to $140 from $175. A lock-up expiry increases the supply of shares regardless of how the business is performing, so price moves around these dates tell you very little about value.

EarningsCisco disappoints, suppliers hit harderCSCO

Cisco fell about 6% before the open after results failed to impress. The damage was worse down the supply chain: AI chip designer Cerebras dropped 17.4% and photonics maker Coherent COHR fell 5.1%. A reminder that the AI theme cuts both ways — it lifted these companies, and it is now the standard they are judged against.

FundraisingIntel raises $20bn at a discountINTC

Intel increased its share offering from $15bn to $20bn, priced at $95 — over 2.5% below the previous close — to fund AI computing capacity. Shares fell 4%. Issuing new shares raises cash but divides the company into more pieces, so each existing share represents slightly less of it.

UpgradeMaersk lifts 2026 guidanceMAERSK-B

The Danish shipping group raised its earnings forecast for the year. Freight rates are one of the clearest live read-throughs on global trade, so a raise here is a modest positive signal for the wider economy.

Charts

Market-implied odds of a September rise, after the inflation print.

Previous session. Cerebras and Coherent moved on Cisco's results.

Crude peaked above $113 in March. Demand destruction has done more to the price than the Hormuz closure.

Where things closed

FTSE 100	Little changed
Nikkei 225	67,524 +0.83%
Kospi	6,579 +3.68%
ASX 200	9,209 −0.45%
CSI 300	4,691 +0.58%
US 30-yr yield	5.24%

Geopolitics, and where it lands

The Strait of Hormuz is still shut

Roughly a fifth of the world's oil normally passes through it. Iran and Oman have been negotiating transit arrangements, and a published Iranian draft would bar US and Israeli vessels, levy payments on countries deemed hostile, and make full reopening conditional on lifting the US naval blockade. Where it lands: energy prices, war-risk insurance for tankers, and shipping rates — which feed inflation, which feeds interest rates, which sets the discount rate on every share you own.

Demand destruction is beating supply disruption

The International Energy Agency cut its 2026 oil demand forecast again, now expecting a fall of 1.6 million barrels a day — 510,000 worse than July's estimate — blaming the Hormuz closure and high fuel prices choking consumption. Where it lands: it explains why crude sits near $83 rather than the $113 of March. Sustained high prices destroy the demand that caused them.

Tariffs are now a disinflation story

Strategists at JPMorgan Asset Management see US disinflation ahead from lower tariff costs and oil eventually flowing again. Where it lands: if that holds, the Federal Reserve's next move becomes a cut rather than a rise — the single biggest variable for share prices over the next year.

Econ Corner

United States

Indicator	Latest	Prev
Inflation (CPI) July, annual	3.4%	3.5%	↓
Core CPI July, ex food & energy	2.5%	2.6%	↓
Real GDP Q2, annualised	1.5%	—	slowed
Unemployment latest reading	4.3%	—	→
Nonfarm payrolls July	−23,000	gain expected	↓
Fed funds rate target range	3.50–3.75%	unchanged	→
Import prices June, monthly	+0.3%	—	↑
Export prices June, monthly	−0.6%	—	↓

United Kingdom

Inflation (CPI) most recent published	2.8%
Bank Rate	3.75%
Unemployment Jan–Mar	5.0%
GDP growth 2026 forecast	0.8%

Headline inflation is falling but still well above target — which is why a rate cut isn't automatic.

What it adds up to

Inflation falling, jobs weakening, growth slowing. That combination usually argues for rate cuts — but at 3.4% inflation is still well above the 2% target, which is why some forecasters still expect a rise in September rather than a cut.

One private forecaster puts the odds of a US recession in the next twelve months at 25%.

Next up

US CPI (August)	11 Sept
Fed decision	September
US payrolls	early Sept

Readings are the latest published at time of writing and are revised regularly. Dates shown against each figure.

The week ahead

SpaceX's lock-up expiry today is the clearest test in the calendar — the first real measure of whether early investors want out. Beyond that, the September Federal Reserve meeting is now the pivot for the rest of the year, and yesterday's reading made a rise there meaningfully less likely.

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