U.S. stock markets held steady near all-time highs on Wednesday, as a global rally driven by hopes for interest rate cuts showed signs of tapering off.
The S&P 500 hovered around its record peak, largely unchanged, while the Dow Jones Industrial Average climbed 285 points (0.6%) by early afternoon. The Nasdaq Composite, which set a new record the day before, also showed minimal movement.
In the bond market, Treasury yields eased as expectations solidified that the Federal Reserve will lower its benchmark interest rate for the first time this year at its September meeting. Lower rates typically encourage borrowing and investment by making loans cheaper for businesses and households, although they carry the risk of reigniting inflation.
Markets in Asia surged following a stronger-than-expected U.S. inflation report released Tuesday. Hong Kong’s Hang Seng jumped 2.6%, Japan’s Nikkei 225 rose 1.3%, and South Korea’s Kospi gained 1.1%. European markets also advanced, though less dramatically, having already reacted to the U.S. data. Germany’s DAX and France’s CAC 40 both added 0.7%.
Despite ongoing concerns that U.S. stocks may be overpriced after a strong rally since April, investor optimism over potential rate cuts continues to dominate. Strong corporate earnings have also helped ease valuation concerns. Brinker International, the parent company of Chili’s, reported better-than-expected profits thanks to increased customer traffic and higher profit margins.
“Chili’s is officially back, baby back!” said CEO Kevin Hochman. Shares in Brinker rose 2.7% after fluctuating through the morning and were already up 17.1% this year.
HanesBrands shares jumped 4.2% after announcing a $2.2 billion acquisition deal with Canada’s Gildan Activewear. The transaction includes a mix of cash and Gildan stock. Gildan’s U.S.-listed shares climbed 10.7%.
Crypto exchange Bullish, which owns CoinDesk, made a striking debut on Wall Street. Its shares nearly tripled after opening at $37 in its initial public offering.
However, not all sectors shared the enthusiasm. Grocery chains and delivery companies dipped after Amazon revealed it would expand fresh grocery same-day delivery to over 1,000 cities and towns. Kroger dropped 4.2% and DoorDash lost 4.7%, while Amazon gained 1.3%.
Cava Group shares fell sharply, down 15.2%, after the restaurant chain missed revenue expectations and lowered its sales growth outlook for 2025. Despite exceeding profit forecasts, the company reported flat guest traffic at existing locations compared to last year.
CoreWeave, a cloud computing firm supporting AI workloads, slid 18.5% after reporting a quarterly loss larger than analysts anticipated.
In the bond market, the 10-year Treasury yield fell to 4.23% from 4.29% the previous day and from 4.50% in mid-July — a significant shift.
Former President Donald Trump has repeatedly called on the Fed to slash rates to stimulate the economy, often using personal attacks against Fed Chair Jerome Powell. However, the central bank has remained cautious, wary that Trump’s tariff policies could reignite inflation. Officials have stressed the need to evaluate additional economic data before making a move.
A new inflation report due Thursday is expected to shed more light on price trends at the wholesale level. Economists forecast that wholesale inflation rose slightly in July to 2.4%, up from 2.3% in June.
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Wall Street Climbs Toward Records on Hopes for Lower Interest Rates
U.S. Stocks Hover Near Record Highs as Wall Street Awaits Inflation Report
