S&P 500 Nasdaq Set Record Highs on Fed Rate Cut Optimism

US stock markets, including the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average, opened higher and hit record highs amid growing optimism that the Federal Reserve will begin cutting interest rates starting next month. This sentiment was fueled by softer-than-expected US inflation data, which raised expectations for a September rate cut and further easing through mid-2025, with markets pricing in a 94-95% chance of a cut at the upcoming Fed meeting. The rally extends globally, with European and Asian markets also advancing, supported by easing trade tensions and strong corporate earnings. Technology stocks continue to drive gains, exemplified by shares of Alphabet rising after a major acquisition offer and Intel benefiting from positive remarks by President Trump. US Treasury yields declined alongside a weaker dollar, reflecting a broader risk-on environment as investors anticipate supportive monetary policy to counter economic softness. Overall, investors remain encouraged by solid earnings growth and a dovish Fed stance, which together help cushion concerns about potential economic slowdown.