US Stocks Hit Record Highs on Inflation Data and Fed Rate Cut Hopes

Market Performance and Inflation Data

• 📈 US stocks closed higher on Tuesday, with the S&P 500 and Nasdaq reaching record closing highs.
• 📊 The Labor Department reported that the consumer price index rose 2% monthly in July, with an annual inflation rate of 2.7%, slightly below forecasts.

Federal Reserve Rate Cut Speculation

• 💡 The inflation data fueled market expectations for a Federal Reserve interest rate cut in September, with probabilities rising to nearly 90%.
• ⚠️ However, Anna Wrathburn of Grenadilla Advisory suggests the Fed may not react as the markets did, citing a core CPI year-over-year of 3.1%, which is higher than expected and indicates persistent inflationary pressures.

Notable Stock Movements

• ⚡ Intel's stock climbed 5.5% after President Trump met with its CEO, despite previous criticism regarding ties to Chinese firms.
• 🚀 Alphabet's shares saw an increase following a $34.5 billion cash offer from Perplexity for its Chrome browser.
• 📉 Cardinal Health's shares dropped 7% after announcing its $1.9 billion acquisition of health care management firm Solaris.