The July CPI data showed a decline in inflation from the multi-decade high level. This, along with a robust job market and improved consumer sentiment, has driven the benchmark indexes higher over the past few days.
However, the current level of inflation could prompt further interest rate hikes as it remains elevated. According to Wharton professor Jeremy Siegel, the second half of 2022 seems favorable for the U.S. stock market, but it will drop to the lows set in June if the Federal Reserve decides to raise interest rates to 4% or higher.
