The US investors read the US inflation report wrongly.

Instead of focusing on the core inflation figures (boxed up in red), the US investors are focusing on the headline inflation numbers.

The core inflation numbers are the Fed's favourite inflation indicators.  The YOY core inflation had been rising for the past 3 months consecutively and it was way above the target rate of 2%. in July.  Thus, it is unlikely  to see the US inflation hits its targeted rate of 2% by the end of 2025 if the Fed starts to cut its rates in September.