# Asian equities climb as US inflation cools, oil falls on inventory

**Published:** 2026-08-13T05:56:56.758Z  
**Topic:** Inflation  
**Sentiment:** neutral  
**Publisher:** TrendWatcher — https://www.trendwatcher.in/article/b74a5942-dd7d-474e-a614-e75aa64d2dc5

US CPI eases to 0.3% monthly core rise and 3.1% YoY, Asian stocks up 2%+, oil drops on rising US inventories – the numbers shaping markets today.

Asian equity indexes surged after U.S. core CPI rose only 0.3% month‑over‑month and 3.1% year‑over‑year, easing concerns that the Federal Reserve will need another aggressive rate hike [2].

| At a glance | |
|---|---|
| US core CPI (MoM) | +0.3% |
| US headline CPI (YoY, July) | 3.4% vs 3.5% in June |
| MSCI Asia‑Pacific index (ex‑Japan) | +2.4% |
| Brent crude | slipped for a second day as U.S. inventories rose |

## Inflation data and market reaction  
The latest U.S. consumer‑price report showed core inflation up 0.3% in August, matching forecasts and marking a modest 3.1% rise from a year earlier. The headline CPI for July eased to 3.4% year‑over‑year, down from 3.5% the month before, exactly in line with market expectations [4]. Those figures trimmed the odds of a September rate hike to roughly 40% and lowered the probability of an October increase to about 60% in the CME FedWatch tool.  

With inflation appearing “relatively calm,” investors shifted to risk‑on assets. MSCI’s gauge of Asian shares climbed for a seventh consecutive session, posting a 2.4% gain and edging toward a fresh record level [3]. South Korea’s KOSPI jumped nearly 4.2% and Japan’s Nikkei rose 1.6%, reflecting the broader rally across the region. Treasury yields fell as bond prices rose, and the U.S. dollar weakened, reinforcing the equity upside.

## Commodity and bond market response  
The same data that soothed equity markets also prompted a pullback in oil prices. U.S. inventory builds signaled weaker demand, leading Brent crude to slide for a second day, despite earlier gains from geopolitical tensions in the Middle East [1]. In the bond market, the two‑year U.S. Treasury yield dropped 11 basis points to 4.19%, while Australian and New Zealand yields followed suit, mirroring the reduced expectations of further Fed tightening [2].

## What to watch  
- **Fed policy meeting (Sept 16‑17)** – market pricing of rate cuts will hinge on any new commentary about inflation durability.  
- **U.S. CPI release (mid‑October)** – a repeat of the recent easing could deepen expectations of a more accommodative stance.  
- **China’s retail‑sales and industrial‑production data** – stronger domestic demand could offset the headwinds from a slowing Chinese economy noted in recent reports.  

The cooling of U.S. inflation has revived risk appetite in Asia, but the durability of the rally will depend on whether the Fed’s policy path and China’s growth trajectory stay on the softer side of expectations.

## Sources
1. Hyperdash — [Asian Equities Rise, Oil Slides on Cooling US Inflation ...](https://hyperdash.com/news/asian-equities-rise-oil-slides-on-cooling-us-inflation-inventory-build)
2. Economictimes — [Asian shares join global equity rally on tame US inflation data](https://economictimes.indiatimes.com/markets/stocks/news/asian-shares-joins-global-equity-rally-on-tame-us-inflation-data/articleshow/123840864.cms)
3. Marketinsider — [Asian Stocks Rally as Cooling US Inflation Revives Global ...](https://marketinsider.net/asian-stocks-rally-as-cooling-us-inflation-revives-global-risk-appetite/)
4. Fxstreet — [Asian stocks rise on soft US CPI, AI earnings rally - FXStreet](https://www.fxstreet.com/news/asian-stocks-rise-on-soft-us-cpi-ai-earnings-rally-202608130351)

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Cite as: TrendWatcher, "Asian equities climb as US inflation cools, oil falls on inventory", https://www.trendwatcher.in/article/b74a5942-dd7d-474e-a614-e75aa64d2dc5