Another lower-than-expected US inflation report boosted the stock market and the bond market, and Wall Street further lowered its bet on the Federal Reserve's interest rate hike this year. At 9:30 New York time, the S&P 500 index rose 0.4%, the Nasdaq 100 index rose 0.6%, and the Dow remained basically flat. The latest data shows that the impact of the Iran war on prices is limited, reinforcing the market view that the Federal Reserve will have more room to delay any potential austerity actions. The money market has so far only fully absorbed expectations of interest rate hikes until December. Short-term US Treasury bonds performed better than the rest of the curve. “The 2026 inflation recovery appears to have peaked last month and returned to the pre-conflict downward trend,” said Jamie Cox of Harris Financial Group. “It really helps the Federal Reserve avoid the mistake of raising interest rates during supply shocks.” However, as the US launched more air strikes against Iran, oil prices rose for the third day in a row. US President Donald Trump has vowed to step up the bombing until Tehran stops attacking ships in the Strait of Hormuz and agrees to open this waterway.

Another lower-than-expected US inflation report boosted the stock market and the bond market, and Wall Street further lowered its bet on the Federal Reserve's interest rate hike this year. At 9:30 New York time, the S&P 500 index rose 0.4%, the Nasdaq 100 index rose 0.6%, and the Dow remained basically flat. The latest data shows that the impact of the Iran war on prices is limited, reinforcing the market view that the Federal Reserve will have more room to delay any potential austerity actions. The money market has so far only fully absorbed expectations of interest rate hikes until December. Short-term US Treasury bonds performed better than the rest of the curve. “The 2026 inflation recovery appears to have peaked last month and returned to the pre-conflict downward trend,” said Jamie Cox of Harris Financial Group. “It really helps the Federal Reserve avoid the mistake of raising interest rates during supply shocks.” However, as the US launched more air strikes against Iran, oil prices rose for the third day in a row. US President Donald Trump has vowed to step up the bombing until Tehran stops attacking ships in the Strait of Hormuz and agrees to open this waterway.