US Stock Market Today: S&P 500 Sees 0.5% Growth as Stocks Hit New Highs

US stocks continued their positive momentum on Wednesday, with major indexes hitting new record highs. The S&P 500 rose 0.4%, while the Nasdaq Composite advanced by 0.5%. 

The Dow Jones Industrial Average climbed 186 points, or 0.4%. Investors are increasingly optimistic that the Federal Reserve will cut interest rates in its upcoming meeting, fueling market gains.

Tech Stocks Drive Market Growth

The technology sector contributed to the market rally. Undervalued stocks such as AMD rose by more than 4%, whereas Apple and Oracle rose by 1% each. The gains came after a bullish trading session on Tuesday, which was fueled by a better-than-expected inflation report. The figures indicated that inflation rates rose to 2.7% in July, compared to the 2.8% that economists expected. 

This eased concerns about rising prices and strengthened hopes that the Federal Reserve may reduce interest rates in its September meeting. Traders have a 99% chance of a rate cut, according to the CME’s FedWatch Tool.

The anticipation of lower rates has boosted investor sentiment. Lower rates enable consumers and businesses to borrow at lower costs, which promotes economic growth. Consequently, the S&P 500 and Nasdaq hiked to new record highs, adding to the gains attained during the previous week. These stock-price gains are further indications of an increase in confidence in the economy, despite ongoing concerns about inflation and global trade.

Also Read: US Stock Market Today: Rate Cut Bets Drive Market, S&P 500 Near Record Highs, Investors Eye Dovish Fed Policy

Global Markets Reflect Positive Sentiment

The rally in US stocks has been mirrored in global markets. In Europe, Germany’s DAX rose by 0.8%, while France’s CAC 40 increased by 0.4%. The FTSE 100 in the U.K. saw a modest gain of 0.1%. Nikkei 225 in Japan rose 1.3 percent in Asia, boosted by relief on trade tensions and positive economic sentiment.

Markets in China also received a boost, with Hang Seng rising by 2.6% and the Shanghai Composite rising by 0.5%. The US-China trade truce is mainly described as the reason behind this worldwide rally, as it eased some of the worries of tariffs and trade barriers. The tariff pause has given confidence to corporations and markets particularly Asian markets that depend massively on trade.

As markets await Thursday’s Producer Price Index (PPI) report, which will provide more insight into inflation trends, investor focus will shift to upcoming central bank meetings. The Jackson Hole symposium may give further insight into the Federal Reserve's monetary policy later in August. Although market sentiment is positive, investors are still conservative, especially in relation to the risks that may arise in the labor market and overall economic growth.