S&P 500 Hits Record Highs — But Can the Rally Survive September?

Global markets entered the week on a wave of optimism, with Wall Street setting fresh records after July’s CPI report matched expectations.

The S&P 500 climbed 1.13% to a record 6,445.76, the Nasdaq 100 gained 1.33%, and the Dow Jones advanced 1.10%. Notably, all 11 S&P 500 sectors closed higher, underscoring broad market strength.

Market Recap

The rally was fuelled by data suggesting the Federal Reserve could begin cutting interest rates as early as September.

The July CPI reading, alongside moderating inflation expectations and softer jobs data, has strengthened the case for policy easing — even as year-on-year inflation remains above the Fed’s long-term target.

Small-cap stocks surged, with the Russell 2000 jumping 2.99%, signalling renewed risk appetite among investors.

Key Drivers

US Treasury yields saw only marginal moves, with the 10-year yield up 0.5 bps to 4.284%. The muted reaction in fixed income suggests markets are squarely focused on the Fed’s next steps.

Tariff concerns remain, particularly around agricultural and industrial goods, but for now, rate cut optimism is in the driving seat.

In today’s calendar, traders will be watching German and Spanish HICP inflation data, as well as speeches from three Fed officials: Thomas Barkin, Austan Goolsbee, and Raphael Bostic.

Sector & Corporate Highlights

The best-performing S&P 500 sector was Communication Services (+1.79%), with standout gains from Paramount Skydance (+8.40%), Take-Two Interactive (+4.44%), and Warner Bros. Discovery (+4.08%). Consumer Staples lagged at +0.17%, weighed down by Kroger (-1.08%) and Philip Morris (-1.01%).

In corporate headlines, Elon Musk accused Apple of antitrust violations over alleged App Store bias towards OpenAI, vowing legal action. Cava Group cut its annual sales outlook, while AI firm Perplexity made a surprise $34.5 billion bid for Google’s Chrome browser — a move that could reshape the tech landscape if US regulators push for a sale.

Other movers included Gildan Activewear, in advanced talks to acquire Hanesbrands, Smithfield Foods raising profit guidance, and Cargill posting its weakest revenue in four years.

Europe & Commodities

European indices delivered mixed results: CAC 40 +0.71%, DAX -0.23%, and FTSE 100 +0.20%. STOXX 600 earnings are projected to rise 4.8% year-on-year for Q2, with Financials leading the upside surprises and Basic Materials under pressure.

Gold rose 0.27% to $3,351.36 an ounce, supported by a weaker US dollar and rate cut hopes. Silver gained 0.79%, while oil prices eased, with WTI down 1.36% to $63.11 per barrel and Brent off 0.85% at $66.11.

Closing Thoughts

The market mood is bullish, but with tariff uncertainties, a still-hot labour market, and global growth concerns, the wave of good news may not last indefinitely. For investors, this is a moment to ensure portfolios are well-positioned for both continued upside and potential shocks.

Having the right broker and trading tools is critical to navigating these swings.

Interested in stocks, ETFs, or professional investment tools?

Join Exante here → https://exante.eu/p/39557/fromkky/

Looking to trade forex with a top-tier broker?

Contact me directly for my personal recommendation and set-up assistance.