US stocks traded higher on Tuesday, with all three major indices rising by around 1%, as the latest Consumer Price Index (CPI) report reinforced expectations of a Federal Reserve rate cut next month. Headline annual inflation held steady at 2.70% in July, below the anticipated 2.80%, while core inflation rose more than expected to 3.10%. The figures suggest that tariff-related price pressures remain limited for now, providing the Fed with room to implement a 25-basis point cut in September.

Locally, South Africa’s benchmark stock market index, the SAALL, advanced 0.64% to close at 101 271 points on Tuesday.

In the UK, the FTSE 100 added 0.20%, extending Monday’s 0.40% gain. The move was supported by a sharp 12% rally in Spirax shares after the steam and thermal energy specialist posted better-than-expected earnings and maintained its full-year guidance. Citi described the results as “encouraging”, with potential for further upgrades, offering reassurance after a period of underperformance. Miners also benefited from the extension of the US–China trade truce, which boosted sentiment around metals demand. Meanwhile, financial stocks with China exposure - such as Standard Chartered and HSBC - gained, alongside oil major Shell, on improved risk appetite and firmer crude prices.

European markets closed modestly higher, with the STOXX 50 and STOXX 600 both rising by around 0.20%, recovering from a subdued session the day before. Investors welcomed news of the US–China tariff truce extension, as President Trump confirmed a further 90-day suspension of additional tariffs on Chinese goods, now extended through to 10 November. China announced a reciprocal pause on its own tariffs. The session was relatively light on corporate earnings, but traders continued to digest key economic indicators from the region.

In Asia, Japanese equities posted strong gains in post-holiday trade. The Nikkei 225 surged 2.15% to close at 42 718, while the broader Topix Index rose 1.39% to 3,066 - both marking new all-time highs. The rally was underpinned by strong corporate earnings and a lift in global trade sentiment following the US-China tariff reprieve.

Mainland Chinese markets also rose. The Shanghai Composite climbed 0.50% to finish at 3 666, while the Shenzhen Component gained 0.53% to close at 11 352. Both indices reached multi-month highs as investors reacted positively to the 90-day extension of the US–China trade truce, aimed at giving negotiators additional time to finalise a broader agreement. Recent trade discussions in Geneva, London, and Stockholm have helped maintain retaliatory tariffs at relatively moderate levels, below the triple-digit mark.

In commodities, WTI crude oil futures fell to $63.50 per barrel, approaching a two-month low of $62.77 reached last week. The decline came as markets weighed the implications of the extended trade truce and looked ahead to upcoming talks between the US and Russia on the Ukraine conflict. Spot gold remained steady around $3 350 per ounce, as investors assessed the US inflation data and strengthened expectations of a Fed rate cut in September.