Stocks logged fresh highs after a benign inflation report on Tuesday, as the market bet on a September rate cut.<\/p>\n
The S&P 500 rose 1.1% to clinch a record close, its 16th record of the year. The Nasdaq rose 1.4%, and marked an all-time high as well, logging its 19th record of 2025. During intraday trading, the two indexes set intraday records.<\/p>\n
The Dow gained 484 points or 1.1%.<\/p>\n
The market\u2019s rise was steady and unobstructed thanks to July’s inflation report. U.S. businesses paid a record $28.4 billion in gross customs receipts to the government in July due to tariffs. That\u2019s a 273% increase from last year.<\/p>\n
That increase is expected to show up in prices for consumer products at some point, but July’s report showed no major evidence of that. Headline inflation held steady at 2.7% in July.<\/p>\n
A more contained inflation is good news for Americans, although one downside is that it “means firms are tolerating a profits margin squeeze,” highlights Neil Dutta, head of economic research at RenMac. “Firms will need to offset the squeeze somehow. That likely implies a continued slowing in employment, hours, cuts to capex or if firms want to roll the dice, a future increase in prices.”<\/p>\n
Still, investors seem to be ignoring that for now and are focused more on rate cuts. Traders are betting on a 94% probability for a September rate cut. Odds for additional cuts in October and December have also risen.<\/p>\n
Interest rate cuts are all good news for investors: They can lower the cost at which companies borrow money. Lower rates can also help them expand, boost hiring, and help increase profits.<\/p>\n
The downside here is the cuts could come at a time when inflation momentum from tariffs is slowly building.<\/p>\n
Household furnishings and supplies, a closely watched area for tariff effects, showed a 0.7% increase in July after a 1% increase in June. Footwear prices rose 1.4%. The price of coffee jumped 2.3% and is poised to move higher given tariffs on Brazil, a major exporter, went into effect Aug. 7.<\/p>\n
“The effective tariffs rate was a little north of 9% in June. That doubled again in early August,” wrote Diane Swonk, KPMG chief economist. “Tariffs are still working their way into consumer prices.”<\/p>\n
In the bond market, the front-end or 2-year Treasury declined by 0.023 percentage point to 3.730% today, a nod to the September rate cut. The 10-year and 30-year yields both increased, although not by much.<\/p>\n
Dollar and gold both declined. When investors feel ready to buy into riskier assets like stocks, it is normal to see haven assets, like precious metals and reserve currencies, decline.<\/p>\n","protected":false},"excerpt":{"rendered":"Stocks logged fresh highs after a benign inflation report on Tuesday, as the market bet on a September…\n","protected":false},"author":2,"featured_media":13882,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[64,63,99,171],"class_list":{"0":"post-63401","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-markets","8":"tag-au","9":"tag-australia","10":"tag-business","11":"tag-markets"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/63401","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=63401"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/63401\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/13882"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=63401"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=63401"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=63401"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}