Stock Market Concludes with a Gain, as Nasdaq and S&P 500 Establish Fresh Peaks
The financial world is abuzz with anticipation as the Federal Reserve's September meeting approaches. Here's a round-up of the latest developments:
The Nasdaq technological index has surpassed its historical high, reaching 21,713.14 points, reflecting optimism in the tech sector. However, the Dow Jones Industrial Average index rose a more modest 1.04%, indicating a mixed performance across the market.
In a significant move, cryptocurrency exchange Bullish made its debut on the New York Stock Exchange today, with its shares closing at $69.97, a significant increase from its initial price of $37.
CoreWeave, a US 'cloud' computer startup, reported second-quarter revenue of $1.21 billion, a strong performance. Yet, the company's shares fell 20.83% to $117.76, possibly due to challenges in increasing its capacity to meet strong demand.
The yield on 10-year US government bonds fell significantly to 4.23% at around 20:10 (Lisbon time), a sign of investor caution. This decrease came after Treasury Secretary Scott Bessent expressed support for a 0.5 percentage point cut in rates after the next Fed meeting.
However, current expectations for the Federal Reserve's interest rate cut after the September 16–17, 2025 meeting are mixed. The most recent Federal Reserve minutes indicate no immediate cut is planned, with the policy rate held steady at 4.5% during the July meeting and a divided committee on easing soon.
Economic growth had moderated in the first half of 2025, but unemployment remains low, and the labor market remains solid. Inflation is still somewhat elevated, and uncertainty around the economic outlook remains high. These factors are contributing to concerns about inflation persistence and economic uncertainty, despite slowing growth and labor market signals that favor easing.
Against this backdrop, some external voices, such as Treasury Secretary Scott Bessent, argue that any standard model would suggest the federal funds rate should be lowered by at least 1.5 percentage points from current levels.
Investors have strengthened their bets on an interest rate cut due to the IPC inflation index, which was in line with market expectations for July. The Producer Price Index (PPI) will be released on Thursday, providing further insight into inflation trends.
Retail sales and a consumer confidence index will be released on Friday, offering valuable insights into consumer spending and overall economic sentiment.
Sam Stovall of CFRA stated that these data will allow investors to refine their expectations regarding future rate cuts. As the Fed's September meeting approaches, the debate within the committee and from market watchers suggests elevated uncertainty surrounding the timing and size of future rate cuts.
The indicator eased concerns about the impact of tariffs on price increases, providing some relief to the market. However, the growth of CoreWeave is being limited by difficulties in increasing its capacity, highlighting ongoing challenges in the tech sector.
In summary, the Fed's September meeting is expected to likely hold rates steady or make only a small cut (around 25 basis points), reflecting concerns about inflation persistence and economic uncertainty, despite slowing growth and labor market signals that favor easing. The debate within the committee and from market watchers suggests elevated uncertainty surrounding the timing and size of future rate cuts.
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