Wall Street continues to party: Nasdaq and S&P set new records for the second day in a row

Euphoria from the July inflation data carried into a second straight day on U.S. trading floors, pushing the Nasdaq and S&P 500 to fresh records. Investors once again flooded the markets with green, fueled by expectations of a Fed rate cut—one that Treasury Secretary Scott Bessent believes should be half a point below the current 4.25–4.5%.

On Wednesday, the Nasdaq (+0.14%) and S&P 500 (+0.32%) both closed at new all-time highs—surpassing the records set just a day earlier—at 21,713.14 and 6,466.58 points, respectively. The Dow Jones rose 1.04%.

"The market is still quite dynamic"

“The market is still quite dynamic,” said Peter Cardillo of Spartan Capital Securities, citing expectations for a Federal Reserve rate cut at the conclusion of its September policy meeting. “There’s a lot of momentum and euphoria right now,” he added in an interview with AFP.

Investors remained notably calm following Tuesday’s release of the July inflation index, which came in line with market forecasts. The data helped ease concerns about the impact of tariffs on consumer prices, prompting investors to strengthen their bets on a cut to the Fed’s benchmark rate.

Markets are taking it almost for granted that the Fed will lower rates by a quarter point

According to the CME FedWatch tool, which analysts use to gauge market sentiment, futures markets are almost certain—pricing in a 96% probability—of a quarter-point cut at the Fed’s next policy meeting.

Treasury Secretary Scott Bessent took a more aggressive stance, advocating for a half-point cut in Fed rates.

Producer inflation, retail sales and consumer confidence index, upcoming tests

On Thursday, investors will be watching for the release of the Producer Price Index (PPI), followed on Friday by retail sales figures and the consumer confidence index. These reports should help investors “fine-tune their forecasts for future rate cuts,” CFRA’s Sam Stovall wrote in a note.