Wall Street closed at fresh records this Tuesday, with the S&P 500 and Nasdaq hitting all-time highs after US inflation data opened up the way for the Fed to cut interest rates in September. Both indexes gained between 1-1.4% and the Dow Jones Industrial Average also joined the rally, up 1.1% during the trading pit. Treasury yields fell in response.
Analysts say the latest CPI data reinforces a market narrative that inflationary spikes from tariffs and other cost pressures remain transitory, keeping alive hopes for a gradual easing cycle. The report showed that inflation was steady from last month and might finish the year in linke with economists’ expectations.
Tech stocks were among the session’s biggest winners. Alphabet shares advanced 1.2% after AI search company Perplexity made a surprising US$ 34.5 billion cash bid for the Google Chrome browser. Intel surged 5.6% following comments from US President Donald Trump praising CEO Lip-Bu Tan, just days after publicly calling for his resignation. The tech-heavy Nasdaq also benefited from ongoing momentum in artificial intelligence.
Beyond tech, bank stocks rose sharply, with the S&P 500 Banks index up 2.1%. Small caps also were also a highlight, while airline shares posted their strongest one-day rally in over a month, up 8.87%. Analysts from BofA noted that inflows into US equities last week were the largest in two years, underscoring the breadth of market participation
The big picture
Geopolitical developments also supported sentiment. Washington and Beijing extended their tariff break until November, bringing some temporary relief for investors. While strategists caution that inflation could pick up later in the year as some tariff costs filter through, the short-term scenario eased concerns about a sudden trade shock.
At Wall Street in general, more stocks went up than down: for every four that rose on the NYSE, only one fell, and on the Nasdaq the ratio was almost three to one. The S&P 500 had 27 stocks hitting their highest price in a year, while the Nasdaq had 104. Even so, trading was a bit quieter than usual, with 16.4 billion shares traded compared to the recent daily average. This could mean some investors are waiting for new economic reports before making big moves.
