LONDON/TOKYO (REUTERS)

Global markets hit a record and the dollar was shared on Wednesday, as investors cheered mild inflation data and signs of resilience in major economies, and expectations of a US rate built demand for riskier assets.

The MSCI All Country World Index of shares climbed for a second day and reached 950.13, an all-time high. Japan's Nikkei stock index, meanwhile, set a fresh peak for a second-straight session.

European stocks advanced 0.5%, with German shares adding 0.6%. Tech and defense stocks led the gains.

US inflation readings, which on Tuesday showed the consumer price index (CPI) rising slightly less than forecast in the year through July, indicated President Donald Trump's import tariffs had yet to filter down to consumer prices.

That helped Wall Street scale new heights, supported by increasing certainty that the Federal Reserve will cut interest rates next month.

“The fact that CPI was broadly as expected was met with relief, leading to equity gains and tighter credit spreads as investors became increasingly confident about another rate cut,” Deutsche Bank analysts wrote.

Trump's signing of an executive order pausing triple-digit levies on Chinese imports for another 90 days also boosted optimism.

Wall Street was also set for gains, with a gauge of S&P 500 futures up 0.7%.

In Japan, a Reuters poll that tracks the Bank of Japan's quarterly tankan business survey showed the Japanese manufacturers' sentiment index improved for a second straight month.

Another report showed Japan's wholesale inflation slowed in July, underscoring the central bank's view that upward price pressure from raw material costs will ease.

The Nikkei rose for the sixth straight day, breaking the 43,000 level for the first time and hitting a fresh record high.

Risk-sensitive cryptocurrency ether rose to an almost four-year high above $4,679.
FED CUT

The dollar index, which tracks the greenback against a basket of major peers, fell for a second day. It was last down 0.2% at 97.80.

The dollar fell 0.2% against the yen to 147.47. The euro added 0.3% to $1.1706, after a 0.5% jump in the previous session.

Traders are pricing in a 94% chance of a Fed cut in September, up from about 57% a month ago, according to the CME FedWatch tool.

Investors had been on tenterhooks about the inflation data because it followed a surprisingly weak jobs report on August 1 and had the potential to stoke concerns about stagflation - when an economy suffers both high inflation and high unemployment.

In sovereign bond markets, German 30-year bond yields fell on Wednesday, retreating from the previous day's 14-year high.

US crude fell 0.2% to $62.99 a barrel.