Stocks rose to fresh intraday records as July inflation data aligned with expectations and reinforced bets that the Federal Reserve will begin cutting rates in 2025, possibly as early as next month. The move pushed large benchmarks higher: the S&P 500 gained about 1.1%, the Nasdaq 100 climbed roughly 1.3%, and the Russell 2000 jumped around 2.9%. It was the S&P 500’s first record close in August, and the Nasdaq 100 also logged a record close.
All 11 S&P 500 sector ETFs finished in positive territory, with leadership coming from communication services, technology, and materials. Among notable movers, chipmakers led the gains: NXP Semiconductors rose about 7.2% and On Semiconductor gained around 6.1%. In the downside, Axon Enterprise slipped about 6.1% after a weaker-than-expected reaction to its quarterly results.
Meta Platforms continued its rally, adding roughly 3.1% to close near a record high of $790, underscoring a strong run after upbeat earnings. Swiss sneaker maker On Holding surged about 8.9% following strong Q2 sales and an optimistic outlook as the brand expands in the “RTO apparel” market. D-Wave Quantum rose about 6.5% after its second-quarter results beat expectations, with the company’s CEO speaking about potential expansion into AI model training.
Cosmetics firm e.l.f. Beauty rose about 4.5% after Morgan Stanley upgraded the stock to overweight and raised its price target to $134 from $114. Five Below also advanced about 4.5% after Loop Capital lifted its rating to buy and raised the target to $165. Tilray climbed roughly 3.2% as reports circulated that President Trump is considering cannabis reform, fueling investor enthusiasm in the sector.
Circle gained about 1.3% after its first earnings report as a public company topped revenue estimates but missed on earnings per share. Nvidia closed largely flat despite a report from The Information suggesting China’s internet regulator has ordered local tech companies to suspend their purchases of Nvidia chips.
laments in the day’s action came from Spirit Airlines, whose shares plunged around 40% after warning it may not survive as a going concern without additional cash. Major network carriers—Delta, American, Southwest, and JetBlue—were higher on the session, helped by a rally in ticket prices during July revealed by inflation data. Plug Power fell about 3.4% after reporting mixed second-quarter results, though the company reiterated a goal of gross margin breakeven in the fourth quarter.
What it means for investors: The in-line July inflation reading supports the view that the Fed’s first rate cut of 2025 could be on the near horizon, lifting equities as investors position for a more favorable monetary backdrop. Traders will still be watching inflation, employment data, and cooling or accelerating price pressures in the coming weeks to gauge the timing and pace of any future rate adjustments. The broader market breadth this session suggests renewed appetite for cyclical and growth names, even as pockets of risk—such as debt-funded travel and capital-intensive sectors—remain sensitive to higher rates and funding conditions.
Additional context to consider: if inflation data continues to align with expectations and the labor market remains resilient, groups tied to technology, AI, and consumer discretionary could sustain momentum. However, headlines on airline cash needs and chip supply dynamics could introduce volatility, underscoring the importance of diversification and a balanced approach to risk.
Summary: a positive session across major indices driven by inflation data supporting rate-cut bets, with broad participation across sectors and notable gains in tech, AI-related firms, and consumer brands, while a few high-profile names faced volatility on earnings or regulatory headlines. A hopeful note for investors is that improved expectations for monetary policy could support continued upside in equities, provided economic data remains in a favorable range.