Key Highlights U.S. inflation figures aligned with projections, diminishing expectations for a Federal Reserve rate increase in September European markets posted widespread gains, with the FT
European equity markets climbed on Thursday following the release of U.S. inflation figures that matched analyst forecasts, diminishing the likelihood of an interest rate increase from the Federal Reserve next month.
The broad Stoxx Europe 600 Index advanced 0.2%, extending its climb toward all-time highs. Positive momentum was observed throughout major European bourses.
STXE 600 I (^STOXX)The German DAX and French CAC 40 each posted 0.3% gains. The London FTSE 100 led regional performance with a 0.6% increase, bolstered by encouraging domestic economic figures from the UK.
The upward momentum followed Wednesday’s U.S. Consumer Price Index release, which revealed headline inflation increased just 0.1% on a monthly basis during July. Core inflation remained unchanged at 2.5% compared to the previous year.
BREAKING: July CPI inflation falls to 3.4%, in-line with expectations of 3.4%
Core CPI inflation falls to 2.5%, also in-line with expectations of 2.5%.
Month-over-month CPI inflation rose +0.1%, up from -0.4% in June.
US stock market futures are rising on the news.
— The Kobeissi Letter (@KobeissiLetter) August 12, 2026
Investor sentiment had been cautious following last week’s disappointing U.S. employment figures. The stable inflation data helped restore confidence among market participants.
Following the CPI release, futures markets swiftly adjusted expectations. The likelihood of a 25-basis-point Federal Reserve rate increase at the September 16 policy meeting fell to approximately 40%, compared to nearly 67% just seven days earlier.
“The US July CPI number offered up nothing in the way of a surprise,” said Sam Hill, head of market insights at Lloyd’s Bank. “It is hard to see a September hike on that basis.”
The United Kingdom’s economy posted 0.4% growth in the second quarter, precisely matching market expectations. The expansion was primarily fueled by robust performance in consumer-oriented service industries.
While the figure represented a modest deceleration from the 0.5% expansion recorded in the first quarter, it proved sufficient to bolster confidence in British assets. The data provides the Bank of England with flexibility to maintain its current stance on rate adjustments without responding hastily to recession concerns.
The encouraging GDP data provided additional momentum for the FTSE 100, particularly benefiting industrial companies and domestic financial institutions.
Oil prices declined from recent multi-week peaks on Thursday while maintaining levels above the $80 per barrel mark. Market participants remained focused on escalating tensions between Washington and Tehran regarding passage through the Strait of Hormuz, sustaining an elevated risk premium in energy markets.
On the corporate front, shares of Pandora jumped nearly 3% after the Danish jewelry retailer surpassed second-quarter profit expectations and upgraded its annual guidance.
Thyssenkrupp declined 1.5% despite refining its 2026 projections. Danish shipping giant Maersk elevated its full-year underlying EBITDA forecast beyond analyst consensus.
Market attention also turned to upcoming releases of Eurozone industrial production statistics for June and Spain’s final inflation numbers for July, both expected later in the trading session.
Additional companies preparing to announce quarterly results included E.On, RWE, Antofagasta, Birkenstock, and Nomad Foods.
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