July CPI Meets Expectations — What It Means for Gold, Nasdaq and the Dollar

U.S. inflation came in broadly as expected in July, giving markets some relief and reducing pressure on the Federal Reserve to raise rates in September.

Headline CPI rose 0.1% month over month and 3.4% year over year, down from 3.5% in June. Core CPI increased 0.2% monthly, with the annual rate easing to 2.5%.

The softer inflation picture, combined with weaker July employment data, has reduced expectations for a September rate hike. Market pricing now puts the probability of a hike at around 38%.

For traders, the shift in Fed expectations could create opportunities across several major markets.

Gold may benefit if lower rate expectations put pressure on the U.S. dollar and Treasury yields.

Nasdaq 100 could also find support, as lower rate expectations generally improve the outlook for rate-sensitive technology stocks.

Meanwhile, a softer inflation backdrop could weigh on the U.S. Dollar, although future moves will still depend on upcoming economic data and Fed communication.

CPI is still running above the Fed’s 2% target, so the rate outlook is far from settled. For investors, the key is to watch how markets respond to the changing expectations — rather than assuming any single asset will move in one direction.