July CPI matched expectations, easing near-term Fed rate-hike concerns and lifting Asian markets, with South Korea's Kospi surging 3.68%. Here's the full market wrap.
The inflation data gauntlet we flagged earlier this week (covered in our companion post) delivered a genuinely reassuring outcome. July's Consumer Price Index matched expectations, easing concerns about imminent Federal Reserve rate increases and sending Asian markets broadly higher into Thursday's session, with South Korea's Kospi surging 3.68% to close at 6,579.04.
A calmer reading than the oil-driven scare earlier in the week
This CPI print stands in useful contrast to the anxiety we tracked earlier this week, when Houthi-driven oil price spikes threatened to complicate the inflation picture ahead of this exact release. Wednesday's data matching consensus, rather than surprising to the upside, gave markets the calmer outcome investors had been hoping for — though not entirely counting on — given how volatile oil prices had been in the days leading up to the report.
A disinflation narrative gaining traction
David Kelly, JPMorgan Asset Management's chief global strategist, pointed to a broader disinflation trend in the US stemming from lower tariff costs and oil eventually flowing out of the Strait of Hormuz once the ongoing negotiations are resolved. That framing ties together several threads we've covered extensively — easing trade tensions and the prospect of a Hormuz resolution both feeding into a more benign inflation outlook than markets feared just days earlier.
Asia's broad-based rally
The positive reaction extended well beyond Korea. Equity-index futures for Japan and South Korea advanced, putting a broader regional gauge on track for a second consecutive day of gains. That kind of multi-day, multi-market advance suggests genuine, sustained relief rather than a single-session pop tied narrowly to one data point.
A notable exception: Nasdaq 100 futures
Not everything moved in lockstep with the positive inflation news. Nasdaq 100 contracts slipped in early Asian trading after Cisco Systems' earnings failed to impress (covered in detail in our companion post) — even though Cisco actually beat estimates on both revenue and earnings. That divergence shows how company-specific earnings reactions can pull against an otherwise positive macro backdrop, echoing a pattern we've tracked repeatedly this earnings season.
What investors should watch
- Whether this week's calmer CPI print holds up against next month's data, or whether oil-driven volatility reintroduces uncertainty
- Progress on the Strait of Hormuz negotiations, now explicitly tied to JPMorgan's broader disinflation thesis
- Whether Asian markets can extend their gains into a third consecutive session
- How US markets open Thursday, given the mixed signals between positive CPI data and Cisco's underwhelming earnings reaction
Bottom line
Wednesday's in-line CPI reading offered markets genuine relief after a volatile stretch of oil-driven inflation anxiety, with Asian markets — led by a 3.68% Kospi surge — responding enthusiastically. With a credible disinflation narrative now building around easing tariffs and hopes for a Hormuz resolution, this week's data may mark a genuine turning point, though Cisco's muted earnings reaction is a reminder that not every signal is pointing the same direction.
This post is based on reporting from Bloomberg and TheStreet as of August 12-13, 2026. This content is for informational purposes only and does not constitute investment advice.
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