The S&P 500 and the Nasdaq hit all-time highs as expectations of a Fed rate cut drive the rally
BlockBeats News, August 13th, Wall Street remained calm as the expected inflation data heightened market speculation of a September rate cut by the Fed, driving stock market gains and a decline in short-term bond yields.
The S&P 500 Index saw gains in all major sectors, rising by 1.1% to hit a new all-time high. The Nasdaq 100 Index also reached a historic high. The Russell 2000 small-cap index rose by 3%. While the initial rally in government bonds faltered, the money market is pricing in a 90% probability of a Fed rate cut next month. The two-year Treasury yield, which is more sensitive to impending policy changes, dropped by 4 basis points to 3.73%.
The U.S. dollar declined. The U.S. core inflation rate rose to its highest level this year, but slow increases in commodity prices eased concerns over tariff-driven pressures. In the stock market, a renewed bet on low rates propelled a rally supported by ongoing enthusiasm for artificial intelligence and robust corporate earnings.
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