FX.co ★ S&P 500 and Nasdaq Climb to New Highs

On Tuesday, U.S. stocks experienced a notable rally with both the S&P 500 and Nasdaq reaching all-time highs, each climbing over 1%, while the Dow surged by more than 500 points. This positive momentum was primarily influenced by July's inflation data, which came in slightly below expectations, sparking optimism for an interest rate cut by the Federal Reserve next month. The Consumer Price Index (CPI) registered a 2.7% increase year-over-year, compared to the anticipated 2.8%, whereas the core CPI rose by 3.1%, marginally surpassing predictions. Consequently, traders now place over a 90% probability on a rate cut in September, with further reductions anticipated later in the year. Market gains were further bolstered by diminishing trade tensions, as President Trump announced a 90-day delay in raising tariffs on Chinese imports. This positive climate was also supported by robust corporate earnings, with Circle Internet Group seeing a 2.3% increase in response to strong second-quarter revenue. Additionally, Intel enjoyed a 5.3% rise after receiving commendation from President Trump for CEO Lip-Bu Tan, and Meta's shares increased by nearly 3%. Market sentiment was further enhanced by the largest influx into U.S. equities seen in two years, coupled with optimistic expectations ahead of the Federal Reserve's upcoming Jackson Hole meeting later this month.