TLDRUS inflation dropped to 3.4% in July 2026, down from prior monthsCore inflation, which excludes food and energy, rose 0.2%Asian and US stock markets showed early gains on the newsBitcoin held steady near $63,000 with little reactionA possible US-Iran peace deal could push inflation lower and sway the FedUS inflation cooled to 3.4% in July 2026. The drop came in the latest Consumer Price Index report from the Bureau of Labor Statistics.Prices are still higher than they were before the US-Iran conflict began. The cooling trend has not fully reversed those gains.Core inflation, which strips out food and energy costs, rose 0.2% for the month. This measure is often watched closely because it filters out short term price swings.How Stock Markets RespondedAsian stock markets showed gains on August 14, 2026, the day the inflation data was released. Traders appeared to welcome the lower reading.US stock futures pointed in a similar direction during pre-market trading hours. Early activity suggested investors felt more comfortable with the pace of price growth.Tech stocks saw some of the strongest movement among sectors. These companies are often sensitive to changes in inflation expectations.Lower inflation can ease pressure on the Federal Reserve to keep interest rates high. That connection is part of why stock investors tend to react quickly to CPI reports.Crypto Market Stays FlatThe cryptocurrency market told a different story. Bitcoin continued trading near the $63,000 level with little movement.Most other digital assets followed Bitcoin’s sideways pattern. Risk appetite across the crypto market remained low.Cryptocurrencies are generally viewed as higher risk investments than stocks. When investors are cautious, these assets often see less trading activity.The Federal Reserve may choose to leave interest rates unchanged for now. Inflation remains above the central bank’s 2% target, which gives policymakers a reason for caution.Higher interest rates tend to keep investors away from riskier assets like crypto. That dynamic may explain why Bitcoin has not moved much despite the cooler inflation data.Some data suggests Bitcoin is trading near its cost of production. Historically, this price zone has lined up with the bottom of past bear markets.President Trump has said a peace deal between the US and Iran could be reached soon. Such a deal could ease global tensions and support investor confidence.A resolution to the conflict may also help bring inflation down further in coming months. Lower inflation could open the door to an interest rate cut from the Federal Reserve later this year.An interest rate cut is often seen as a positive signal for higher risk assets. If that happens, some analysts believe it could support a stronger move higher for the crypto market.The post US Inflation Falls To 3.4% In July 2026: Stocks And Crypto Reaction appeared first on Blockonomi.