Australia

Australian shares are sloping downward this morning, despite modest gains for most global markets on Thursday. The July consumer-price index (CPI) report confirmed that price pressures are continuing to ease in the US, particularly for used cars and airline fares. The data convinced investors that the Federal Reserve may not need to raise interest rates at its next policy meeting.

ASX futures were down 23 points or 0.3% as of 6:00am on Friday, suggesting a lower open.

US stocks edged higher Thursday after fresh data showing cooling inflation boosted investor optimism about the likelihood of the Federal Reserve pausing its interest rate increases.

The S&P 500 gained less than 0.1%, the Dow Jones Industrial Average added 0.2%, or roughly 50 points, and the Nasdaq Composite rose 0.1%. The Canadian market outperformed the US, with the S&P/TSX Composite rising 0.3%.

Price pressures continued easing last month. The consumer-price index (CPI) in July rose 0.2% from the prior month and 3.2% from a year ago, the Labor Department reported Thursday. That mostly aligned with economist expectations.

Investors bet the mild inflation data would likely deter the Fed from raising interest rates at its next policy meeting. Since last year the central has aggressively increased its benchmark rate, which currently stands at its highest level in 22 years. The rapid ascent in interest rates crushed stocks last year and continues to loom over markets.

In commodity markets, Brent crude oil fell 1.4% to US$86.37 a barrel while gold edged down 0.1% to US$1,913.19.

Australian government bonds increased, with the 2 Year yield rising to 3.82% and the 10 Year yield climbing to 4.04%. US Treasury notes were mixed, with the 2 Year yield declining to 4.85% and the 10 Year yield rising to 4.11%.

The Australian dollar lost ground, at 65.19 US cents, after previously closing at 65.27. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, moved up to 97.47.

Asia

Chinese shares ended higher, rebounding from recent losses as investors digested China's latest economic data and expect Beijing to announce more stimulus. Energy stocks and financials led gains. PetroChina rose 1.5% and Sinopec gained 1.1% as oil prices rallied. Citic Securities advanced 1.2% and China International Capital Corp. rose 0.85%. Consumer brands and automakers were among losers. Midea Group declined 2.1%, while Great Wall Motor dropped 1.3%. The benchmark Shanghai Composite Index closed 0.3% higher at 3254.56. The Shenzhen Composite Index gained 0.1% and the tech-heavy ChiNext Price Index rose 0.5%.

Hong Kong shares pulled back from early losses and closed flat. Communications and energy stocks led the gains. China Unicom rose 3.3% after it reported robust earnings Wednesday. Cnooc gained 1.8% and PetroChina Company climbed 2.1%. Trip.com rose 2.7% after Beijing resumed approval for outbound group tours to another 78 countries, including the US and Australia. Techtronic Industries was the worst performer of the session, slumping 17% after posting a net profit decline. Country Garden Holdings fell 6.3% amid concerns about its financial health. The benchmark Hang Seng Index closed flat at 19248.26. The Hang Seng Tech Index closed 0.1% higher.

Japanese stocks ended higher as investors awaited key inflation data from the US. The benchmark Nikkei Stock Average closed with a 0.8% gain.

Indian shares closed lower after the Reserve Bank of India left its policy rate unchanged at 6.50% for the third time in a row. RBI Gov. Shaktikanta Das said inflationary risks persist due to volatile international food and energy prices, lingering geopolitical tensions and weather-related uncertainties. Investors awaited US inflation data due later in the day. Financial and consumer-related stocks led declines. Kotak Mahindra Bank slipped 1.6% and Axis Bank dropped 1.1%. Asian Paints fell 2.9% and Tata Motors shed 0.75%. JSW Steel was among the gainers, rising 1.2%. Zee Entertainment advanced 18% to INR285.55, its highest closing level since April 2022, after reports that an Indian tribunal approved its merger with Sony Group's India unit. The benchmark Sensex index fell 0.5% to 65688.18.

Europe

European stocks rose after US inflation broadly matched forecasts in July. "The August number will be out before the Fed next meets in mid-September, but there's nothing in this release to suggest it will do anything other than keep interest rates exactly where they are," wrote Neil Birrell, chief investment officer at Premier Miton Investors.

The pan-European Stoxx Europe 600 gained 0.8%, the French CAC 40 jumped 1.5% and the German DAX ended 0.9% higher. Luxury-goods and property stocks were among the biggest pan-European risers.

Meanwhile, London’s FTSE 100 index closed up 0.4% in another positive session for European markets. China's decision to end its ban on group tours to other countries helped boost travel, leisure and the luxury sector, said CMC Markets UK.

However, the British index somewhat underperformed its European peers as more than 10% of the index went ex-dividend, including the likes of AstraZeneca, Rio Tinto, Shell, NatWest, Barclays, BP, and HSBC, CMC Chief Market Analyst Michael Hewson said in a research note. "On the plus side, house builder Persimmon shares are getting a lift despite seeing a sharp fall in completions from the same period a year ago," Hewson observed.

North America

US stocks edged higher Thursday after fresh data showing cooling inflation boosted investor optimism about the likelihood of the Federal Reserve pausing its interest rate increases.

The S&P 500 gained less than 0.1%, the Dow Jones Industrial Average added 0.2%, or roughly 50 points, and the Nasdaq Composite rose 0.1%. The Canadian market outperformed the US, with the S&P/TSX Composite rising 0.3%.

Price pressures continued easing last month. The consumer-price index (CPI) in July rose 0.2% from the prior month and 3.2% from a year ago, the Labor Department reported Thursday. That mostly aligned with economist expectations.

Investors bet the mild inflation data would likely deter the Fed from raising interest rates at its next policy meeting. Since last year the central has aggressively increased its benchmark rate, which currently stands at its highest level in 22 years. The rapid ascent in interest rates crushed stocks last year and continues to loom over markets.

"The grounds are there for the Fed not to have to hike at the next meeting," said Mark Hamilton, chief investment officer of Hirtle Callaghan & Co. "The recent numbers point towards being on a steady-as-she-goes, sustainable path for the economy and that is good for markets."

Traders are pricing in a roughly 90% probability that the Fed leaves rates unchanged in its September meeting, up from 72% a month ago, according to federal-funds futures.

The major stock indices finished the session below intraday highs, however, as investors also weighed an uptick in weekly jobless claims. Initial claims, a proxy for layoffs, increased to a seasonally adjusted 248,000 in the week ended Aug. 5, the Labor Department said Thursday. Economists were expecting 230,000 initial claims.

All year, the robust labor market has given the economy a leg of support and investors a sigh of relief. Some market participants worried that Thursday's higher-than-expected jobless claims could signal weakness ahead.

"At this point, it's all eyes on the labor market," said Timothy Chubb, chief investment officer at Girard, a wealth advisory firm backed by Univest.

Disney led the S&P 500, rising 4.9% after the entertainment giant announced it would raise prices for its streaming services and crack down on password sharing. The stock logged its best one-day percentage gain since last November.

Shares of Capri Holdings, parent company of Versace, rallied 56% after the fashion group agreed to be bought by Coach owner Tapestry. Shares of Tapestry fell 16%.