Stocks Hit Record as CPI Fuels Bets Fed Will Cut: Markets Wrap

Calm prevailed across Wall Street as an in-line inflation reading bolstered speculation the Federal Reserve will have room to cut rates in September, driving stocks higher and short-dated bond yields lower.

All major US equity indexes climbed more than 1%, with the S&P 500 and the Nasdaq 100 hitting all-time highs. The Russell 2000 of smaller firms jumped 3%. While an initial rally in Treasuries faded, money markets priced in an about 90% chance of a Fed reduction next month. Two-year yields, more sensitive to imminent policy moves, slid four basis points to 3.73%. The dollar fell.

S&P 500 hits record.

Photographer: Michael Nagle/Bloomberg

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