Softer US PPI Strengthens Risk Sentiment as Rate Hike Expectations Fade

Ultima Markets Daily Market Insights — 14 August 2026

Second Inflation Surprise Reinforces Expectations of a Fed Pause

Global financial markets headed into Friday trading with strong risk-on momentum after a second consecutive soft US inflation report. Following Wednesday’s benign CPI release, Thursday’s weaker-than-expected Producer Price Index (PPI) data further strengthened expectations that the Federal Reserve will leave interest rates unchanged at its September meeting.

US July PPI Breakdown:

• Headline PPI MoM: 0.0% (vs. +0.2% expected)
• Headline PPI YoY: 4.7% (vs. 4.9% expected, down from 5.5% in June)
• Core PPI YoY: 4.2% (down from 4.7% in June)

According to the latest CME FedWatch data, the probability of a September rate hike has fallen to approximately 35%, while expectations for a rate hold have increased to around 65%.

With the risk of further Fed tightening continuing to diminish, global risk appetite has strengthened. Lower rate hike expectations continue to support US equities while maintaining downward pressure on the US dollar.

FX, Equities & Commodities Technical Insights

US Dollar Index (DXY): Bearish Bias Remains Below 100.00

The Dollar Index continues to consolidate beneath the key 100.00 psychological resistance level. As expectations for tighter monetary policy continue to fade, the broader directional bias remains to the downside.

USDX, H4 Chart | Ultima Markets MT5

Technical resistance remains firmly established below 100.00. As a result, the preferred strategy remains selling into rallies while the index trades beneath this level.

A decisive move below 99.50 could expose the next major support level at 99.00. Until a breakout emerges, traders may prefer to monitor the 99.50–100.00 consolidation range for clearer directional signals.

Nasdaq 100: Breaks Above 30,000 as Bullish Momentum Strengthens

Declining interest rate pressures have provided renewed support for technology valuations, helping the S&P 500 record another all-time high while the Nasdaq 100 decisively reclaimed the important 30,000 psychological level.

NAS100, H4 Chart | Ultima Markets MT5

The successful recovery above 30,000 reinforces the broader bullish structure for technology stocks. Short-term traders may look for opportunities on pullbacks towards the 30,000 or 29,800 areas, provided the key 29,000 support level remains intact.

The broader outlook remains constructive while momentum continues to favour the upside.

Gold: Profit-Taking Emerges as Support Zone Comes into Focus

Over in precious metals, despite a supportive long-term backdrop driven by easing rate expectations, gold experienced a modest pullback as traders locked in profits following its strong rally.

XAUUSD, H4 Chart | Ultima Markets MT5

Recent weakness appears to represent a healthy technical correction rather than a change in trend.

While additional short-term consolidation remains possible, the broader outlook continues to favour gold as long as the US dollar remains under pressure.

Traders should monitor the $4,250-$4,300 support region for signs of stabilisation and potential buy-on-dip opportunities as the primary uptrend attempts to reassert itself.

Market Summary & Key Highlights Today

Markets head into the final session of the week with strong risk-on sentiment after softer CPI and PPI readings reinforced expectations of a Federal Reserve pause in September.

Broader market sentiment is expected to remain supportive, allowing equities to finish the week on a firm footing. Meanwhile, attention remains focused on the US dollar and gold as both asset classes continue to respond to shifting expectations for US monetary policy.

What to Watch Today:

• US Dollar Index Below 100.00: Monitor whether 100.00 continues to cap rallies and whether 99.50 breaks to extend the downtrend.
• Nasdaq 100 Above 30,000: Watch whether buyers can maintain acceptance above the breakout level.
• Gold Support at $4,250-$4,300: Look for signs of renewed buying interest following the recent bout of profit-taking.

Disclaimer

Comments, news, research, analysis, price, and all information contained in the article only serve as general information for readers and do not suggest any advice. Ultima Markets has taken reasonable measures to provide up-to-date information, but cannot guarantee accuracy, and may modify without notice. Ultima Markets will not be responsible for any loss incurred due to the application of the information provided.