Finance

The latest consumer price index showed headline inflation remaining steady at an annual rate of 3.4% in August, while the core reading came in slightly higher than anticipated at 0.3% for the month. This firmer underlying price data prompted market participants to aggressively recalibrate their expectations for monetary policy. Implied probabilities for a 25-basis-point interest rate increase at the upcoming central bank meeting surged to roughly 87%.

Crude benchmarks experienced volatile trading amid escalating geopolitical tensions involving the U.S. and Iran, driving Brent crude prices over the $104 per barrel mark. Supply worries intensified after Houthi militants seized a strategic shipping chokepoint, leading Saudi Arabia to temporarily shut down its prominent East-West pipeline as a safety precaution. Additionally, structural inflation concerns were amplified as domestic diesel costs scaled historic highs by reaching $6 a gallon.

Digital assets faced persistent downward pressure as tightening central bank expectations diminished demand for non-yielding risk assets. Bitcoin slid below $77,000, hit its lowest level in two weeks, and mirrored broader weakness in digital asset investment fund flows. The cooling sentiment was further highlighted as institutional spot Bitcoin exchange-traded funds registered a fourth consecutive day of net capital outflows.