Specialist James Denaro is seen at his station on the New York Stock Exchange trading floor on Tuesday, August 12, 2025. (AP Photo/Richard Drew)
U.S. stocks nudged higher on Wednesday, riding the wave of optimism from a worldwide rally fueled by growing confidence that the Federal Reserve could trim interest rates in September.
U.S. Markets Extend Gains
The S&P 500 inched up 0.3%, marking another fresh record. The Dow Jones Industrial Average surged 463 points, or 1%, while the Nasdaq Composite added 0.1%, setting its second consecutive record.
Bond markets also saw a lift as Treasury yields dipped, with the 10-year yield falling to 4.23% from 4.29% the day before. Investors are almost certain the Fed will deliver its first rate cut of the year next month—a move that could make borrowing cheaper for households and businesses. Lower rates often boost markets but come with the risk of stoking inflation.
Asia and Europe Join the Rally
Markets across Asia jumped after Tuesday’s better-than-expected U.S. inflation report reinforced expectations for a rate cut. Hong Kong’s Hang Seng shot up 2.6%, Japan’s Nikkei 225 climbed 1.3%, and South Korea’s Kospi added 1.1%.
European stocks also rose, though gains were smaller. Germany’s DAX and France’s CAC 40 each rose 0.7%.
Housing Sector Leads Wall Street
Homebuilders topped the U.S. market winners list, with PulteGroup jumping 5.4% and Lennar climbing 5.2%. Lower interest rates could make mortgages more affordable, encouraging more homebuyers.
Restaurant operator Brinker International, owner of Chili’s, gained 1.6% after posting stronger-than-expected quarterly results. CEO Kevin Hochman celebrated the comeback, saying, “Chili’s is officially back, baby back!”
HanesBrands climbed 3.7% after agreeing to a $2.2 billion buyout by Gildan Activewear, whose shares soared 11.8% in the U.S.
Market Debuts and Big Movers
Bullish, a cryptocurrency exchange led by former NYSE president Tom Farley, skyrocketed 83.8% on its first day of trading.
On the flip side, grocery and delivery stocks slid after Amazon announced it would expand same-day fresh grocery deliveries to over 1,000 locations. Kroger fell 4.4% and DoorDash dropped 3.8%, while Amazon gained 1.4%.
Cava Group tumbled 16.6% after missing revenue expectations and trimming its 2025 sales forecast, despite beating profit estimates. CoreWeave plunged 20.8% after reporting a wider-than-expected loss.
Rate-Cut Hopes Face Inflation Risks
While Wall Street cheers the prospect of cheaper borrowing, the Fed remains cautious. Officials are wary of potential inflation flare-ups, especially with added pressure from tariffs. They want more inflation data before committing to a cut.
On Thursday, a report on U.S. wholesale prices is expected to show a slight uptick in inflation—rising to 2.4% in July from 2.3% in June.
