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Investors pile into risk after tame inflation

Warren Buffett & Bershire Hathaway just dropped $5 billion on United Healthcare stock.

A softer US inflation reading has unleashed a wave of risk-taking, with traders snapping up small-cap, emerging-market, and semiconductor stocks on the expectation that Fed rate cuts are near. Measures of volatility in stocks, bonds, and currencies have dropped to multi-year lows, reflecting a surge in confidence that looser policy will keep growth humming despite tariff headwinds.

The bullish tilt is fueled by a mix of cooling inflation, a softer labor market, and corporate earnings, particularly from megacap tech, that continue to exceed expectations. With markets pricing a 90% chance of a September rate cut, investors see an opening to rotate into assets with higher return potential, from speculative European bank debt to crypto, before policy shifts are fully reflected in prices. For now, the prospect of easier money is overshadowing concerns that tariffs or slower growth could eventually sap momentum.