S&P 500 nears record as July CPI cools, gold tops $4,400

The S&P 500 climbed to within striking distance of a record after July inflation matched forecasts, cutting money-market odds of a September Fed hike to below 50 percent.

"If I do not see signs of continued disinflation soon, I am prepared to act," Fed Governor Lisa Cook said in Alaska, reflecting the central bank's split over how aggressively to respond to price pressures.

The rally was broad, with chipmakers leading gains and driving the Nasdaq 100 to a one-month high. Short-dated Treasuries outperformed as traders trimmed hike bets. Gold surged past $4,400 an ounce, with futures briefly touching $4,500, while silver topped $67. US crude settled near $83 a barrel.

The data shifts the calculus for the Federal Reserve's Sept. 16-17 meeting, where the FOMC voted 9-3 in July to hold its benchmark rate at 3.5%-3.75%. Money markets now price a 41.9 percent chance of a hike, down from roughly 48 percent before the report.

July CPI Cools, Hike Odds Slide

Headline consumer prices rose 0.1 percent in July from the prior month, while core inflation, which strips out food and energy, gained 0.2 percent — both in line with estimates. On an annual basis, headline inflation ran at 3.4 percent and core at 2.5 percent.

The report eased concerns that price pressures were reaccelerating after a run of firmer data. Cleveland Fed President Beth Hammack, who voted for a hike in July, said "one 25 basis point move probably doesn't do a whole lot for the economy," suggesting more tightening could be needed. Philadelphia Fed President Anna Paulson, by contrast, argued current rates are sufficient to return inflation to the central bank's 2 percent goal. Fed Chair Kevin Warsh is navigating the divisions among policymakers.

Gold Breaks $4,400 as Rate Bets Shift

The cooler inflation reading removed a key headwind for non-yielding assets. Spot gold climbed as much as 1.6 percent in a session to breach $4,400 an ounce, its highest in over two months, with futures touching the $4,500 level. The metal remains below the record above $5,000 set earlier in 2026.

Silver outperformed, surging past $67 an ounce, as industrial demand from solar and electronics joined investment buying. Persistent central bank purchases, particularly from the People's Bank of China, have provided a structural floor under prices as monetary authorities diversify reserves away from the dollar.

For equity investors, the tame inflation print supports the case for the Fed to hold rates steady, sustaining the August advance. Wall Street now expects the central bank to hold rates next month, though the 9-3 split among policymakers leaves the path uncertain.

This article is for informational purposes only and does not constitute investment advice.