U.S. inflation figures surprised on the upside once again and were the main reason for the volatility seen in the markets last week. On Wednesday, we learned that U.S. prices rose by 9.1% year-over-year in June, a higher-than-expected figure and the highest level since November 1981. The data sent the markets lower, with the S&P 500 Index hitting its lowest level since June 22 during Thursday's session. However, U.S. stocks rallied on Friday following quarterly results from some major banks, but also thanks to the release of a survey by the University of Michigan showing that long-term inflation expectations fell in June to 2.8% from 3.1% previously. This measure is now at its lowest level in a year and down sharply from the high of +3.3% reached in Q2. While the major equity indices ended in the red by the end of the week, this data likely prevented a larger decline.
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