Yesterday, stock indices ended mixed. The S&P 500 rose by 0.26%, while the Nasdaq 100 declined by 0.13%. The Dow Jones Industrial Average lost 0.04%.

Global stock indices continued trading near record levels, while bonds extended gains after a subdued US inflation report eased concerns over an imminent Fed rate hike. The MSCI All Country World Index rose by 0.1%, hovering just below its intraday all-time high set last week. The Asian index gained nearly 1% in a tech-led rally, while futures pointed to further gains in Europe. Earlier, the S&P 500 closed near a record after traders scaled back September Fed rate hike expectations to roughly 35%.

Treasuries rose across the curve, with the rate-sensitive 2-year yield falling by two basis points to 4.18%. The yen strengthened by 0.1% to 159.25 per dollar after sources indicated that Prime Minister Sanae Takaichi's government supported the idea of a near-term Bank of Japan rate hike, with the next move likely in September or October.

The combination of a soft inflation report on Wednesday and weak jobs data last week gives the Fed under Kevin Warsh considerably more room to remain on hold, removing a key concern for markets recovering from July's AI sector sell-off. The data itself showed consumer prices rose by 0.2% in July from the previous month, in line with economist forecasts, while the core inflation measure matched its slowest pace since March 2021.

Meanwhile, the AI trade has regained momentum. South Korea's Kospi surged by 4%, entering a technical bull market, with chipmakers Samsung Electronics and SK Hynix each gaining more than 4%. Asian investors are once again playing the long-Korea, short-Hong Kong theme, a strategy briefly abandoned during July's sharp Kospi selloff but revived with a vengeance in August. After institutional profit-taking and AI-bubble fears cooled valuations from historic peaks, real money is cautiously returning to the segment.

Regarding the S&P 500 technical picture, buyers' main task today will be to overcome the nearest resistance level of $7,756. This would support gains and open the possibility of a push toward $7,774. Equally important for bulls will be maintaining control above $7,798, which would strengthen buyers' positions. In case of a downside move amid reduced risk appetite, buyers must defend the $7,737 area. A break below that level would quickly push the instrument back to $7,718 and open the path toward $7,698.