Global Markets Stabilize Amid Hopes For Federal Reserve Rate Cuts

Global stocks and government bonds remained steady after U.S. consumer price data indicated moderate inflation in July, fueling speculation over the Federal Reserve's potential rate cuts. Market reactions diverged with varying bets on the size of the rate reduction. Central banks globally are also easing policies as inflation cools.

Global stocks held steady and government bond yields got a slight reprieve on Wednesday following U.S. consumer price data showing moderate inflation for July. The development is fortifying investor expectations that the Federal Reserve may soon begin cutting interest rates.

The market is actively debating whether the Fed's first rate cut, anticipated as early as September, will be by 25 or 50 basis points. Notably, the consumer price index rose 0.2% last month, aligning with economists' forecasts, but shelter costs, including rents, surged faster than expected.

By mid-afternoon trading in the U.S., the S&P 500 dipped by 0.15%, while the Dow Jones Industrial Average gained 0.19%, and the Nasdaq Composite fell by 0.6%. Europe's STOXX 600 was up 0.3%, and the FTSE 100 rose 0.4%, bolstered by lower-than-expected British inflation figures for July.

(With inputs from agencies.)