Wall Street extends record run as Fed rate-cut bets build

US stocks extended their record-setting momentum on August 13, with the S&P 500 and Nasdaq Composite closing at all-time highs for the second straight session, as mounting expectations for interest rate cuts kept investor sentiment buoyant. The Dow Jones Industrial Average rose 463.66 points, or 1.04 per cent, to 44,922.27. The S&P 500 gained 20.82 points, or 0.32 per cent, to 6,466.58, while the Nasdaq added 31.24 points, or 0.14 per cent, to finish at 21,713.14. The rally comes on the heels of a tamer-than-expected US inflation report earlier in the week, which bolstered hopes that the Federal Reserve will begin easing policy as soon as September.

According to the CME FedWatch Tool, traders are now pricing in nearly a 100 per cent probability of a 25 basis-point cut, with some, including Treasury Secretary Scott Bessent, suggesting a half-point reduction could be on the table given recent weak jobs data. The central bank last lowered rates in December.

Tech momentum pauses, small caps rally

While Wall Street’s broader tone was positive, some heavyweight technology names lost steam following sharp gains on August 12. Nvidia, Alphabet, and Microsoft ended lower as investors rotated into other sectors. Apple bucked the trend, climbing 1.6 per cent after a Bloomberg report revealed plans to expand into AI-powered robots, home security, and smart displays.

Advanced Micro Devices surged 5.4 per cent to lead technology gainers. Small-cap stocks, tracked by the Russell 2000 index, jumped 2 per cent to a six-month high, benefiting from the prospect of cheaper borrowing costs. Healthcare stocks, one of the year’s laggards, advanced 1.6 per cent to rank among the top-performing S&P 500 sectors.

Market breadth improves, eyes on data ahead

Market breadth was strong, with advancing issues outnumbering decliners by more than four-to-one on the NYSE. Paramount Skydance soared 36.7 per cent after securing exclusive broadcasting rights to the Ultimate Fighting Championship for seven years.

Investors are now watching the producer price index report to be released on August 14 for further clues on inflation trends. The upcoming Federal Reserve Jackson Hole symposium, set for August 21-23, could also provide fresh signals on the timing and scale of rate cuts. Volume on US exchanges totalled 16.9 billion shares, slightly below the 20-session average of 18.3 billion.

(With inputs from agencies)