Wall Street extends record run as Fed cut bets fuel global rally

Wall Street extends record run as Fed cut bets fuel global rally  

U.S. stocks powered higher on Wednesday, with the Dow Jones Industrial Average surging more than 450 points to close near all-time highs, as investors doubled down on expectations that the Federal Reserve will begin cutting interest rates in September. The S&P 500 and Nasdaq Composite also notched back-to-back record closes, buoyed by softer-than-expected inflation data and growing speculation of a larger-than-usual 50 basis point cut.  

The rally was ignited by the July Consumer Price Index report, which showed inflation rising less than economists had forecast. That surprise reinforced the view that the Fed’s tightening cycle is over and that policymakers may move aggressively to support growth amid signs of a cooling labor market. Treasury Secretary Scott Bessent added fuel to the fire by publicly urging the central bank to slash rates by as much as 175 basis points over the coming months.  

Gains were broad-based, with auto and financial stocks leading the charge in India’s markets, while in the U.S., heavyweight tech names helped keep the Nasdaq in positive territory despite some profit-taking. The upbeat mood spilled into Europe and Asia, where major benchmarks tracked Wall Street’s momentum, underscoring the global reach of the rate-cut narrative.  

Corporate news added extra spark to the session. Paramount Skydance Corporation soared as much as 60% in the wake of its high-profile merger, bolstered by a blockbuster $7.7 billion deal to secure exclusive U.S. rights to UFC events — a move analysts say could reshape the sports media landscape.  

Still, beneath the euphoria, some market veterans are sounding notes of caution. With valuations stretched and geopolitical uncertainties — including U.S.-Russia talks and ongoing tariff disputes — still in play, the path ahead may not be a straight line. Upcoming data on producer prices and retail sales will offer fresh clues on whether the disinflation trend is durable enough to justify the market’s aggressive rate-cut bets.  

For now, though, the bulls are firmly in control, riding a wave of optimism that has lifted equities from New York to Mumbai, and rekindled the kind of “risk-on” appetite not seen since the early days of the post-pandemic recovery.