Stock markets rose and the dollar fell Wednesday on growing prospects of cuts to US interest rates after soft inflation data, with Japan's Nikkei hitting a fresh record high.

It followed fresh all-time pinnacles for Wall Street's S&P 500 and Nasdaq indices Tuesday after US data showed a tamer-than-feared impact on prices from President Donald Trump's tariff blitz.

That boosted expectations that the US Federal Reserve and its embattled chief Jerome Powell will cut interest rates next month.

"European markets are following their Asian counterparts higher... with yesterday's US core inflation uptick doing little to dampen spirits," noted Joshua Mahony, chief market analyst at Rostro trading group.

The US consumer price index reading for July showed annualised inflation at 2.7 percent, unc

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