Wall Street Gains as Global Stock Market Rally Resumes/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. stocks advanced Wednesday, extending a global rally fueled by expectations of Federal Reserve interest rate cuts. The S&P 500, Dow Jones, and Nasdaq all moved higher, with bond yields easing. Positive corporate earnings and international market gains also bolstered investor sentiment.
Wall Street Gains Quick Looks
- S&P 500 up 0.4%, hitting fresh all-time highs.
- Dow Jones climbed 259 points; Nasdaq up 0.5%.
- Asian and European markets rallied on U.S. inflation data.
- Corporate winners included Brinker International (+7.5%) and HanesBrands (+4.2%).
- Losses for Kroger (-4.5%) after Amazon grocery expansion news.
- Bond yields fell as Fed rate cut hopes strengthened.
- Inflation concerns remain due to tariffs and economic risks.
Wall Street Gains as Global Stock Market Rally Resumes
Deep Look
NEW YORK — Wall Street extended its upward momentum Wednesday as optimism over potential U.S. interest rate cuts rippled across global financial markets. Investors, buoyed by lower Treasury yields and upbeat earnings, pushed the S&P 500 up 0.4% to another all-time high. The Dow Jones Industrial Average gained 259 points (0.6%), while the Nasdaq Composite rose 0.5%, building on Tuesday’s record close.
The catalyst for this renewed surge came from the bond market, where Treasury yields retreated amid growing expectations that the Federal Reserve will lower its benchmark interest rate for the first time this year at its September meeting. A rate cut would ease borrowing costs for households and businesses, encouraging spending on big-ticket items like homes, cars, and equipment. However, the Fed remains cautious, wary that looser monetary policy could reignite inflationary pressures.
Global Rally Fueled by Inflation Data
The rally began overseas, with Asian stocks surging after the U.S. reported better-than-expected inflation figures. Hong Kong’s Hang Seng Index jumped 2.6%, Japan’s Nikkei 225 gained 1.3%, and South Korea’s Kospi rose 1.1%. European markets followed suit, though their gains were more modest—Germany’s DAX added 0.7% and France’s CAC 40 advanced 0.5%.
Market sentiment has been especially sensitive to inflation reports, as they directly influence the Fed’s interest rate decisions. Tuesday’s data strengthened the case for a rate cut, encouraging investors to pile into equities worldwide.
Corporate Winners and Losers
Several companies posted strong earnings that helped push markets higher. Brinker International, parent company of Chili’s, saw its shares jump 7.5% after reporting better-than-expected quarterly results. CEO Kevin Hochman celebrated the turnaround, noting both increased customer traffic and higher profits per sale.
HanesBrands also rallied 4.2% after announcing it would be acquired by Gildan Activewear in a $2.2 billion cash-and-stock deal. Shares of Gildan, traded in the U.S., surged 10.1% on the news.
On the downside, grocery chain stocks slipped after Amazon revealed plans to offer fresh grocery delivery in over 1,000 cities with same-day service. Kroger dropped 4.5%, weighing on the S&P 500, while Amazon itself rose 1.2%.
Restaurant chain Cava Group suffered a steep 16.8% decline after posting weaker-than-expected revenue and cutting its 2025 growth forecast. Similarly, cloud computing firm CoreWeave fell 13.2% after reporting larger losses than anticipated.
Bond Market Movement and Fed Pressure
Treasury yields fell sharply, with the 10-year yield dropping to 4.24% from 4.29% the previous day, and down from 4.50% in mid-July. Lower yields often signal expectations for rate cuts, and political pressure has added to the mix.
President Donald Trump has vocally called for lower rates, often directly criticizing the Fed chair. Yet Fed officials remain cautious, pointing to the risk that Trump’s tariffs could worsen inflation. They have stressed the need for more economic data before making a move.
Inflation Concerns Ahead
While Tuesday’s consumer inflation report fueled optimism, attention now shifts to Thursday’s wholesale inflation data. Economists expect a slight uptick, with the producer price index projected to rise to 2.4% in July from 2.3% in June. Any surprise jump could challenge the Fed’s willingness to cut rates in September.
For now, investor enthusiasm appears undeterred, with Wall Street benefiting from a mix of global market strength, strong corporate results, and the possibility of lower borrowing costs ahead.
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