FX.co ★ Rate Cut Bets Lift S&P 500 and Nasdaq to Records

On Tuesday, Wall Street's primary indices experienced an upswing, as both the S&P 500 and Nasdaq reached unprecedented heights, advancing by 1.1% and 1.3%, respectively. This surge followed the release of July's inflation data, which largely aligned with expectations. The Consumer Price Index rose by 0.2% on a monthly basis and 2.7% on an annual basis, alleviating apprehensions about ascending prices amidst ongoing trade tensions. This development buoyed prospects for a rate cut by the Federal Reserve next month, with market participants estimating a roughly 90% likelihood of a 25-basis-point reduction in September. The Dow Jones Industrial Average increased by 450 points, bolstered by the alleviation of trade tensions after President Trump announced a 90-day extension on tariff postponement for Chinese goods. This movement was further reinforced by robust corporate earnings, including a 1.2% increase in Circle Internet Group, attributed to strong second-quarter revenue. Intel shares rose by 5.5% following President Trump's commendation of CEO Lip-Bu Tan, while Meta and Alphabet saw gains of 3.1% and 1.2%, respectively. Investor confidence received an additional boost from the most substantial inflows into U.S. equities in two years and growing optimism in anticipation of the upcoming Federal Reserve's Jackson Hole meeting later this month.