Asia's AI Trade Carried the Overnight Tape Into a Softer US Inflation Print

by Tomas Ferreira · August 13, 2026

Markets Reporter, US Market Current

The global session that preceded Thursday's US open was carried almost entirely by Asian technology, and specifically by Korea. The Kospi closed at 6,835.55, up 3.9 percent, its second straight advance of more than three percent, according to Eurasia Business News. Japan's Nikkei 225 finished at 68,609.92, a gain of 1.6 percent. Hong Kong's Hang Seng added 0.1 percent and the Shanghai Composite 0.4 percent, while Australia's S&P/ASX 200 fell 0.6 percent — the one significant regional index to close lower.

The proximate catalyst was corporate rather than macro. Lenovo shares jumped 19 percent in Hong Kong after the company reported record revenue, per the same report. That result landed in a region already positioned for artificial-intelligence hardware demand, and the read-through moved semiconductor and component names across Seoul and Taipei rather than staying contained to a single stock. Korea's index is unusually concentrated in exactly that supply chain, which is a large part of why a two-day move of this size happened there and not in Sydney.

Europe opened firm but restrained, with the STOXX Europe 600 around 661 points, up roughly 0.24 percent. US index futures were close to unchanged pre-market: Dow futures higher by about 0.13 percent, S&P 500 futures by 0.11 percent, and Nasdaq 100 futures slightly lower at minus 0.11 percent. That divergence — Asian tech sharply higher, US tech futures marginally negative — suggests the overnight move was read as a Korea and Lenovo story rather than a broad revaluation of the AI complex.

The US closes it followed were modest. The S&P 500 finished Wednesday at 7,748.53, up 0.26 percent; the Nasdaq Composite at 26,588.49, up 0.54 percent; the Dow Jones Industrial Average at 53,770.27, down 0.04 percent; and the Russell 2000 at 3,045.56, up 0.61 percent. Small caps outperforming large caps on a day when the Dow was flat is a mild risk-on signature, consistent with a market that had just absorbed a benign inflation print.

The macro underpinning is a rate-hike debate that has been steadily deflating. July consumer prices rose 0.1 percent on the month and 3.4 percent from a year earlier, down from 3.5 percent in June. Following that, market-implied odds of the Federal Reserve holding its target range at the September 16 decision moved to roughly two-thirds, against about 45 percent a week earlier, on CME Group data cited by Eurasia Business News. Investing.com's Fed Rate Monitor showed a comparable split as of its Wednesday afternoon update, with 62.6 percent on a hold and 37.4 percent assigned to a quarter-point increase.

It bears repeating that the contested move here is upward. The Federal Open Market Committee held at 3.50 to 3.75 percent in July under Chair Kevin Warsh, with nine members voting to hold and three officials dissenting in favour of hiking immediately, per U.S. Bank. The easing of expectations described above is a reduction in the probability of tightening, not the emergence of a cutting cycle.

Treasuries have reflected that shift only partially. The Fed's H.15 release put the 10-year constant-maturity yield at 4.70 percent on August 11, with the two-year at 4.22 percent, the five-year at 4.39 percent, the 30-year at 5.24 percent and the three-month bill at 3.89 percent. Eurasia Business News reported the 10-year trading near 4.67 percent early Thursday, easing from recent highs. On the August 11 marks the two-to-ten spread sits near 48 basis points and the two-to-thirty spread near 102 — a curve that is positively sloped and notably steep at the long end, which is not the shape a market anticipating imminent policy easing would produce.

That long-end steepness is the more durable feature of the current rates picture. A 30-year yield above 5.2 percent alongside an effective funds rate of 3.63 percent says investors are demanding compensation for holding duration well beyond anything the near-term policy path explains. Softer hike odds have not compressed it.

Commodities are the reason that right tail exists. Brent crude was below $88 a barrel on Thursday after a six-session rally, while WTI traded around $82.20 on Wednesday, near a one-and-a-half-week high, per FXStreet. The Strait of Hormuz remains closed to normal traffic, and the Energy Information Administration's August Short-Term Energy Outlook lifted its 2026 Brent forecast by $5 to $87 a barrel on that basis. The agency stated: "We have increased our estimates of Middle East shut-in crude oil production in the coming months compared with our July forecast due to continued severe constraints on Strait of Hormuz transits, which we assume persist through August."

The scale of the disruption in the EIA's figures is easy to underweight. Transits through the strait fell to 4.9 million barrels per day in the second quarter of 2026, against 21.6 million a day in the fourth quarter of 2025. Regional production shut-ins averaged 5.5 million barrels per day in July, down from 7.5 million in June. Saudi Arabia has rerouted crude through the East-West pipeline to Yanbu on the Red Sea, and flows through the Bab al-Mandab Strait averaged 8.1 million barrels a day in the second quarter, up from 5.4 million in the fourth quarter of 2025. The EIA nonetheless expects Brent to average $69 in 2027 as regional output normalises — a forecast that embeds a resolution nobody has yet negotiated, and which is the single largest assumption sitting underneath the disinflation path currently priced into the front end.

Gold traded near $4,384 an ounce, down about $24 or 0.55 percent, in Thursday's pre-market hours. A softer bid for the metal alongside receding hike odds is mildly counterintuitive and probably says more about a firmer tone in risk assets overnight than about any change in the inflation outlook.

Both of the morning's catalysts landed at 8:30 a.m. Eastern, and both came in on the soft side. The July producer price index was unchanged on the month, below a consensus that had looked for a 0.2 percent rise, and the 12-month rate fell to 4.7 percent from 5.5 percent in June, the Bureau of Labor Statistics reported. Final demand goods fell 0.7 percent, with gasoline down 5.7 percent doing most of the work, while final demand services rose 0.2 percent, slowing from 0.5 percent in June. Prices excluding food and energy rose 0.2 percent against 0.3 percent expected, with the annual rate easing to 4.2 percent from 4.7 percent. The exception sat in the measure excluding food, energy and trade services, which rose 0.4 percent on the month from 0.1 percent in June and held at 4.7 percent over the year — a reminder that the headline softness was concentrated in energy.

Reuters observed that PPI data is largely collected early in the month, so the sharp crude strength that developed late in July was probably not captured. That is the same survey-timing caveat the pre-release previews had flagged, and it argues for treating the print as provisional rather than as evidence that pipeline pressure has broken.

Initial jobless claims arrived at the same moment and rose more than expected, to 209,000 for the week ended August 8 from a revised 200,000, though the four-week moving average held at 199,000. Taken together, the two releases pushed against the case for a September hike rather than for it. US markets were open and mid-session as of this writing, with the day's ranges not yet set; Treasury yields eased in the immediate aftermath of the inflation data, per CNBC.