By William Collins, consultant in stock markets – Eurasia Business News, August 12, 2026. Article no 3079
US stock markets traded higher on August 12 after a softer inflation report strengthened hopes that the Federal Reserve can move toward easier monetary policy. The Nasdaq Composite led the advance, Treasury yields fell across the curve, oil prices declined and gold remained near historically elevated levels.
The Dow Jones Industrial Average traded close to unchanged, while the S&P 500 rose 0.2%. The technology-heavy Nasdaq Composite gained 0.4%, outperforming broader US equity benchmarks after the CPI data matched expectations.
Cerebras Systems (CBRS) shares fell 11.5% in extended trading on Wednesday after the semiconductor company reported second-quarter results that fell significantly short of Wall Street forecasts.
US Inflation Cools in July CPI Report
The Consumer Price Index increased 3.4% year on year in July, down from 3.5% in June and in line with the consensus forecast. On a monthly basis, consumer prices rose 0.1%, also matching expectations.
The July CPI report matters because it suggests inflation is moving gradually lower without an abrupt deterioration in economic activity. The reading remains above the Federal Reserve’s 2% inflation objective, but the deceleration reduces immediate pressure for additional interest-rate increases.
Core CPI, which excludes volatile food and energy prices, rose 2.5% from a year earlier, down from 2.6% in June. On a monthly basis, core inflation advanced 0.2%.
For financial markets, the core CPI result is particularly important. It is often seen as a better indicator of persistent domestic inflation because it is less affected by commodity-price moves, weather conditions and short-term changes in food costs.
Nasdaq Outperforms the Dow and S&P 500
The Nasdaq Composite’s 0.4% gain reflected the sensitivity of technology stocks to interest-rate expectations. Growth companies derive much of their market value from earnings expected several years in the future. When Treasury yields fall, the value investors assign to those future profits can increase.
The S&P 500’s 0.2% advance pointed to broader risk appetite across the market, although the modest gain suggested continued caution. Investors are balancing the encouraging inflation data against concerns over corporate earnings, economic growth, fiscal deficits and high borrowing costs.
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The Dow Jones index remained close to equilibrium. Its limited movement highlights a mixed response among industrial, financial, healthcare and consumer-facing companies. Lower inflation can support demand and reduce financing pressures, but many Dow components remain exposed to slower global trade, energy costs and changing consumer behaviour.
Treasury Yields Decline Across the Curve
US Treasury yields fell following the inflation data. The two-year Treasury yield dropped three basis points to 4.19%, while the benchmark 10-year Treasury yield fell two basis points to 4.66%. The 30-year Treasury yield declined one basis point to 5.23%.
The fall in the two-year yield signals reduced expectations for further near-term Federal Reserve tightening. Meanwhile, lower 10-year and 30-year yields support equity valuations and may gradually ease financing conditions for mortgages, corporate borrowing and infrastructure investment.
Even after the decline, yields remain high by recent historical standards. The 10-year yield was around 4.67% on August 12, according to market data, well above the long-term average and still a material constraint on rate-sensitive sectors.
Oil Prices Edge Lower
Crude oil prices declined during the session. Brent futures fell 49 cents, or 0.55%, to $88.42 per barrel by 1315 GMT. US West Texas Intermediate crude lost 25 cents, or 0.3%, to trade at $82.95 per barrel.
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Lower oil prices could help reduce headline inflation in coming months, particularly if the move translates into lower gasoline, shipping and industrial-energy costs. However, Brent remains close to $90 per barrel, leaving global inflation vulnerable to renewed supply disruptions or geopolitical tensions.
Gold Price Up 1%
Gold remained near $4,400 per ounce on August 12, with market data showing the precious metal at approximately $4,400.68. Its elevated level reflects continued demand for portfolio hedges against geopolitical uncertainty, fiscal risks, currency volatility and potential inflation surprises.
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A softer US CPI reading and declining Treasury yields are generally supportive for gold. Lower yields reduce the opportunity cost of holding a non-interest-bearing asset, while expectations of less restrictive Federal Reserve policy can pressure the US dollar.
The market response to July’s inflation report was cautiously constructive: equities rose, yields declined, oil softened and gold remained resilient. The next major test will be whether subsequent inflation and labour-market data confirm that US price pressures are cooling on a sustainable basis.
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© Copyright 2026 – Eurasia Business News. Article no. 3079
Eurasia Business News 