TLDR
- U.S. CPI came in as expected, easing fears of a September Fed rate hike
- European indexes rose broadly, with the FTSE 100 up 0.6%, DAX and CAC 40 each up 0.3%
- UK economy grew 0.4% in Q2, matching forecasts
- Oil prices slipped but held above $80 a barrel amid U.S.-Iran tensions
- Pandora shares jumped nearly 3% after beating Q2 earnings estimates
European stock markets moved higher on Thursday after U.S. inflation data came in line with expectations, reducing the chance of the Federal Reserve raising interest rates in September.
The pan-European Stoxx Europe 600 Index rose 0.2%, continuing its push toward record levels. Gains were spread across the region.
Germany’s DAX and France’s CAC 40 each gained 0.3%. London’s FTSE 100 outperformed, rising 0.6%, helped by positive UK economic data.
The lift came after Wednesday’s U.S. Consumer Price Index report showed headline CPI rising 0.1% month-on-month in July. Core inflation held at 2.5% year-on-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
Markets had been on edge after last week’s weaker-than-expected U.S. jobs report. The steady inflation reading helped settle nerves across trading floors.
Money markets quickly repriced after the data. The probability of a 25-basis-point Fed rate hike at the September 16 meeting dropped to around 40%, down from nearly 67% just a week ago.
“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.”
UK Economy Grows 0.4% in Q2
The UK economy expanded 0.4% in the second quarter, matching market forecasts. Growth was driven by strength in consumer-facing service sectors.
The result slowed slightly from 0.5% growth in Q1 but was enough to support sentiment around UK assets. It gives the Bank of England room to stay patient on rate cuts without rushing to respond to recession fears.
The solid GDP figure added extra support to the FTSE 100, with industrials and domestic lenders among the beneficiaries.
Oil Slips, Corporate Earnings in Focus
Crude oil prices pulled back from multi-week highs on Thursday but stayed above $80 a barrel. Traders continued to watch tensions between the U.S. and Iran over access to the Strait of Hormuz, which has kept a risk premium built into energy prices.
In corporate news, Pandora shares rose nearly 3% after the Danish jewellery company beat second-quarter earnings estimates and raised its full-year outlook.
Thyssenkrupp fell 1.5% despite narrowing its 2026 guidance. Danish shipping company Maersk raised its full-year underlying EBITDA guidance above analyst expectations.
Investors also looked ahead to Eurozone industrial production data for June and Spain’s final July inflation figures, due later in the session.
Other companies scheduled to report earnings included E.On, RWE, Antofagasta, Birkenstock, and Nomad Foods.
Stop guessing and start investing with confidence. KnockoutStocks gives you the AI insights, market intelligence, and stock research you need to spot opportunities, cut through the noise, and make smarter investment decisions — all in one powerful platform.
Sign up today and get 50% OFF full access to our premium stock picks.
Simply use coupon code SPECIAL50 at checkout to claim your exclusive discount.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
