U.S. Markets Hit Records on Rate Cut Expectations

U.S. equities hit consecutive record highs as softer CPI data and Treasury Secretary Bessent’s dovish outlook fuelled expectations for a September Fed rate cut. The S&P 500 and Nasdaq both reached new peaks.

Stocks initially extended Tuesday’s rally but retreated during Wednesday’s session while still closing higher. The Dow Jones led major indices with a 1% jump as investors priced in nearly a 100% probability of lower rates next month.

Healthcare and biotech outperformed, while technology stocks showed mixed results despite strong demand in the AI sector. Apple and Amazon gained on positive momentum and sector sentiment.

Bitcoin reached a record $123,600 but was outpaced by Ethereum, which surged to a near four-year high above $4,700. The crypto rally reflects legislative wins and new financial products, with altcoins like Cardano and Solana posting double-digit weekly gains.

Gold climbed to $3,399/oz, advancing 1.5% as the July CPI print reinforced Fed rate cut expectations.

Investors favour gold and precious metals over cash, anticipating falling rates and hedging against persistent inflation.

The dollar index fell for a second consecutive day to two-week lows as easing inflation and Bessent’s dovish signals drove Treasury yields lower.

Oil prices edged up slightly ahead of the Trump-Putin summit but remained near multi-month lows due to oversupply concerns and rising U.S. inventories. Lithium jumped over 25% for the month following Chinese supply cuts and CATL’s mine suspension. Natural gas declined but remains up nearly 29% year-over-year amid volatile demand and energy infrastructure threats.

The Nifty posted modest gains on Wednesday after data revealed India’s consumer price inflation fell more than expected in July to an eight-year low, dropping below the RBI’s tolerance band and increasing the likelihood of another rate cut.

The Nifty reclaimed its position above the 5 DEMA at 24568, closing up 131 points (0.54%) at 24619. Having established a strong base near 24340, the index is gradually gaining momentum and appears poised to test the next resistance level at 24820, aligned with the 50 DEMA. Support remains at yesterday’s low of 24465.

Indian markets are expected to open near Wednesday’s close. Global market direction hinges on tomorrow’s Alaska summit between U.S. and Russian leaders regarding Ukraine.

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Source: HDFC Securities Prime Research