The market awaits the US CPI; European stocks opened collectively higher, US stock futures fluctuated within a narrow range, and spot gold edged lower.

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The global market holds its breath as investors focus on the key U.S. inflation data to be released at 20:30, a report considered the last crucial data point influencing next week's Federal Reserve interest rate decision. Yesterday, unexpectedly weak PPI fueled the debate in the market over a larger rate cut.

On Thursday, major European stock indices opened higher across the board, with the Euro Stoxx 50 index gaining 0.15%. Futures for the S&P 500 and Nasdaq 100 gave back earlier gains. Japanese and South Korean stock markets closed higher, hitting new all-time closing highs. The US dollar rose sharply against the yen in the short term, up 0.12% for the day.

In the commodities market, gold edged lower after rising in the previous session. Oil prices also retreated after three consecutive days of gains.

Major European stock indices opened higher across the board. Euro Stoxx 50 up 0.15%, FTSE 100 up 0.33%, France's CAC40 up 0.26%, Germany's DAX 30 up 0.11%.S&P 500 futures were little changed.Nikkei 225 closed up 1.2% at 44,372.50 points, TOPIX closed up 0.2% at 3,147.76 points. South Korea’s KOSPI closed up 0.9% at 3,344.15 points.The US dollar rose sharply against the yen in the short term, up 0.12% for the day at 147.648. According to Kyodo News, Sanae Takaichi told former Prime Minister Fumio Kishida that she will run for president of the Liberal Democratic Party.The yield on 10-year U.S. Treasuries was little changed at 4.05%.Spot gold fell 0.3% to $3,629/oz.West Texas Intermediate crude oil fell 0.3% to $63.48 per barrel.Bitcoin rose 0.6% to $114,300.45.

CPI Data in Focus, Market Bets on Rate Cut Path

Currently, all market attention is focused on the U.S. CPI data to be released later on Thursday. According to market estimates, the core CPI excluding food and fuel could rise 0.3% in August for the second consecutive month. If the reading is weaker than expected, it could further spark speculation for a 50-basis-point rate cut by the Fed next week.

BMO Capital Markets' Ian Lyngen and Vail Hartman said:

“We remain in the 25-basis-point rate cut camp. For a half-point rate cut to become a real possibility, tomorrow's core CPI data would need to be soft.”

Ulrike Hoffmann-Burchardi of UBS Global Wealth Management believes that the combination of slowing job growth and manageable inflation will put the Fed on a rate-cut path, expecting a 25-basis-point cut in September and three more consecutive cuts through January 2026. In addition, the European Central Bank is expected to keep rates unchanged at its meeting later Thursday.

Data released Wednesday showed that August’s core Producer Price Index (PPI), excluding food and energy, fell unexpectedly by 0.1% month-on-month in the U.S., well below the consensus forecast for a 0.3% gain. July’s data was also revised down. This provides strong arguments for dovish Fed officials.

Neil Dutta of Renaissance Macro Research said, “The Fed should cut rates by 50 basis points next week—but I don't think they'll do it.” He pointed out that hawks would argue unemployment remains low, financial conditions are loose, and tariffs may bring future inflationary pressure.

Major European stock indices opened higher across the board, with the Euro Stoxx 50 index up 0.15%. S&P 500 and Nasdaq 100 futures gave back earlier gains. S&P 500 and Nasdaq 100 futures gave back earlier gains. Spot gold fell 0.3% to $3,629/oz.

Asian Markets Mixed, Tech Stocks Stand Out

After rising for five consecutive sessions, the MSCI Asia-Pacific index was flat on Thursday. Japanese and Korean indices closed higher, while Australia’s index fell.

Tech stocks were the highlight of Asian markets. Shares of Japan’s SoftBank Group jumped around 10% to a record high as its major holding Arm Holdings climbed during U.S. trading. Shares of Korean chipmakers TSMC and SK Hynix also rose. Alibaba rebounded after an early dip as the company seeks to raise $3.17 billion by issuing zero-coupon convertible notes, which could be the largest such deal so far this year.

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