U.S. stock markets reach new peaks due to favorable inflation figures.

European equities experienced growth

, and Administrator

2025 August 28 . 8:59 AM

2 min read

U.S. Stock Market Surges to All-Time Highs Following Positive Inflation Figures

U.S. stock markets reach new peaks due to favorable inflation figures.

The US stock market experienced a rebound on Tuesday, as investors priced in over a 96% chance of a 25 basis point interest rate cut by the Federal Reserve in September. The Nasdaq Composite, S&P 500, and Dow Jones Industrial Average all reached historic highs during the trading day.

The expected impact of the potential interest rate cut is generally bullish, as it is anticipated to ease borrowing costs and potentially boost equity valuations. However, the actual decision hinges on evolving economic conditions, particularly labor market data and inflation persistence.

The July Consumer Price Index (CPI) data showed a 0.2% increase, slightly below economists' projections. This increase in CPI data increases the likelihood of a rate cut in September. However, some economists like Bill Adams argue that persistent inflation in services could make a cut less likely.

In the tech sector, major companies such as Intel and Alphabet saw gains. Intel shares advanced after President Donald Trump announced a meeting with CEO Lip-Bu Tan, while Alphabet shares rose following a cash offer of $34.5 billion to acquire the Chrome browser.

On the other hand, tech stocks as a whole fell by 2.1%, and Nemetschek SE and SAP dropped by 11% and 7% respectively.

The US-China trade truce was extended for 90 days, providing a relief to global markets. Tariffs will not be introduced until November 10.

European stocks also closed higher on Tuesday, with the STOXX 600 index rising 0.2%. The energy sector led gains with a 1.5% rise, and Vestas Wind Systems gained 4.7%.

However, concerns persist about the quality of statistical data following the dismissal of the chief of the Bureau of Labor Statistics. In addition, investor confidence in Germany experienced a bigger-than-expected drop in August.

In conclusion, the US stock market rebounded on Tuesday, supported by solid results from major tech companies, a moderation in trade tensions, and growing expectations of interest rate cuts. The actual impact of the Fed's decision in September will depend on the evolving economic conditions.