Inflation held steady in July and ran slightly cooler than expected, increasing the odds of a Federal Reserve rate cut next month.

Chicago Federal Reserve Bank President Austan Goolsbee on Friday left the door open to supporting an interest-rate cut in September should fresh data prove reassuring, but said recent reports showing a rise in services inflation give him some pause amid what he calls the "stagflationary" impulse from tariffs.

Futures markets are also expecting a rate cut. Investors peg the chances of a quarter-point interest rate cut at nearly 96%, according to the CME FedWatch Tool, a measure of market sentiment.