Photo: Alex P Pexels
Stocks jump from Wall Street to Tokyo — and Europe’s loving it too — after cooler U.S. inflation fuels September rate-cut fever. August 13, 2025
Markets were in celebration mode today. A softer-than-expected U.S. inflation report and a lot of winking from Washington sent traders betting big on a Federal Reserve rate cut in September. The mood? Less “maybe” and more “when’s the party?”
Wall Street’s high
The S&P 500 and Nasdaq smashed fresh records. The Dow jumped nearly 0.8% by midday. Inflation in July rose just 2.7% year-on-year — under the 2.9% forecast — and that was enough for investors to all but price in a 25-basis-point cut. Odds of that move in September? Around 90%, according to CME FedWatch. Rate-sensitive stocks — tech, healthcare, finance — went vertical.
Global ripple
Tokyo’s Nikkei tore through the 43,000 mark for the first time. The MSCI All Country World Index hit a new high. Asian and European markets both caught the wave, helped by a weaker dollar and falling U.S. Treasury yields. Even Japan’s wholesale inflation cooling a bit gave traders one more reason to buy.
And Europe?
Euro Stoxx 50 added over 1% on the day, with banks and automakers leading. A cheaper dollar makes U.S. exports less competitive, giving European exporters some breathing room. Frankfurt’s DAX and Paris’ CAC 40 both closed at multi-month highs.
Politics joins the rally
U.S. Treasury Secretary Scott Bessent poured more fuel on the fire, calling for a half-point cut in September and hinting at expanding Washington’s new “chip revenue-sharing” scheme to other sectors. Semiconductor stocks loved it.
Bottom line
One cooler inflation print and suddenly it’s a global rally. September’s Fed meeting now looks less like a mystery and more like a formality. If the cut comes through, expect the champagne corks — and maybe some cautionary whispers — to pop worldwide.
Sources
- Reuters — U.S. indexes hover near record highs on rate-cut bets
- Reuters — Asia stocks rise, dollar weakens as rate-cut view strengthens
- AP News — Wall Street near records on Fed rate-cut optimism
- The Guardian — Bessent calls for half-point cut and wider chip deal
Disclaimer: This article reflects publicly available reporting as of August 13, 2025. Market figures may change. This is not investment advice.
Independent. Unbought. Unafraid — powered by readers like you.
About the Author
