The S&P 500 and Nasdaq both hit record highs, driven by expectations of a Federal Reserve interest rate cut

ChainCatcher news, according to market news, Wall Street remains calm, as the expected inflation data has intensified market speculation about a rate cut by the Federal Reserve in September, driving the stock market up and short-term bond yields down.

All major sectors of the S&P 500 index rose, with the index increasing by 1.1%, reaching a historic high. The Nasdaq 100 index also hit an all-time high. The Russell 2000 small-cap index rose by 3%. Although the initial upward momentum of government bonds weakened, the money market expects about a 90% chance of a rate cut by the Federal Reserve next month. The yield on the two-year Treasury bond, which is more sensitive to upcoming policy changes, fell by 4 basis points to 3.73%.

The dollar fell. The core inflation rate in the U.S. rose to its highest level since the beginning of the year, but the slow increase in commodity prices eased concerns about tariff-driven pressures. In the stock market, renewed bets on low interest rates fueled a rally supported by ongoing enthusiasm for artificial intelligence and strong corporate earnings.