U.S. Inflation Cools to 3.4% in July, Easing Fed Hike Fears and Lifting Stocks

U.S. CPI inflation eased to 3.4 percent for the year ending July 2026, down from 3.5 percent in June, the Bureau of Labor Statistics reported August 12. Stocks rose August 13 as investors pared back bets on a Federal Reserve rate hike. The deceleration is modest, and the Fed's preferred PCE gauge is expected above 3 percent — so a hike is less likely, not off the table.