The inflation report published on Tuesday reinforced market participants' expectations that the U.S. central bank will cut interest rates at the September meeting, opening the way for continued growth in the stock markets.

Let's start with the reports. The U.S. consumer inflation report released yesterday showed that, despite all the turmoil linked to Donald Trump's tariff wars, annual inflation stabilized at 2.7%, while the month-over-month reading fell in line with forecasts. Yes, core inflation rose, but the market ignored it—on one hand, due to a strong desire for rate cuts, and on the other, because it believes that the president, by replacing the central bank's leadership with a more loyal team, will secure lower borrowing costs regardless, as he considers it essential for launching economic growth in the country.

Two main factors—the stabilization of inflation below the key psychological threshold of 3% and Trump's stance on interest rates—will stimulate demand for corporate stocks. As a result, on Tuesday, the broad-market S&P 500 and the tech-heavy NASDAQ 100 once again set fresh record highs, while the Dow Jones Industrial Average reversed upward and moved closer to its recent peak.

I believe it is also important to note two other critical reasons for maintaining optimism: the extension of the moratorium on tariff quotas concerning China—after Beijing ignored Trump's bluff about tariff hikes and secondary sanctions against it—and a similar situation with India, as well as the launch of negotiations between the U.S. and Russia, which appear likely to have a global impact not only on the Ukraine crisis but also on the broader global balance of power.

All this positive news supports demand for risk assets, especially U.S. corporate stocks, as the main beneficiary both in the tariff wars against its satellite countries and in the prospects of ending the war between the West and Russia with its allies and stakeholders. However, in this situation, the Russian Federation will also emerge as a beneficiary, as exiting the conflict with the West as the winner will strengthen it not only politically but also economically, securing its rightful place among the superpowers.

What to expect in the markets today

I believe that the theme of U.S. rate cuts and the prospects of ending the acute phase of the conflict in Europe will continue to support demand for equities. Fed funds futures are pricing in a 94.2% probability of a rate cut in September, compared to 85.2% yesterday.

As for the dollar, I do not expect a significant decline against the basket of major currencies in the Forex market. This is primarily due to the weakness of the currencies in that basket. These are the currencies of U.S. satellite countries, which—as mentioned earlier—will be "plundered" by Washington, having to pay customs duties when selling goods to the U.S. and committing to invest in the American economy for many years. This will weaken these economies, making them completely dependent on their overlord.

The cryptocurrency market will react nervously to global events and the state of the global economy, but a strong surge in demand for tokens is unlikely. Gold and oil prices will also remain closely correlated with global developments, U.S. interest rates, and the Ukraine crisis, which will likely keep them moving within wide sideways ranges.

Forecast of the Day

Bitcoin

After reaching a local high, Bitcoin may correct downward if it falls below 118,467.00 amid demand for more profitable assets such as corporate stocks. In this scenario, a decline toward 116,061.00 is expected. The 118,065.93 mark can serve as a selling level.

#USDX

The dollar index may fall toward 97.40 amid rising expectations of a Fed rate cut at the September meeting. In this scenario, a drop to 97.40 points is possible after consolidation below the 98.00 mark. The 97.92 mark can serve as a selling level.