S&P 500 and Nasdaq Hit Record Highs as Inflation Data Fuels Rate Cut Expectations

The S&P 500 and Nasdaq closed at record highs on Tuesday as July's inflation data aligned with expectations, reinforcing market bets on a Federal Reserve rate cut in September. The Consumer Price Index rose 0.2% monthly, with annual inflation slightly below forecasts, prompting calls from President TRUMP for lower rates. Shorter-dated Treasury yields dipped, and rate futures priced in an 88.8% probability of a 25-basis-point cut next month.

"The CPI data supports equities, with the Fed now more likely to cut in September and inflation appearing transitory," said Katherine Bordlemay of Goldman Sachs Asset Management. "We maintain conviction in mega-cap tech—the big are getting bigger." Alphabet shares gained 1.2% amid acquisition interest in its Chrome browser, while Intel surged 5.6% after Trump praised its CEO.