Stocks hit record high as July inflation data bolsters rate cut bets

Stocks shot to fresh intraday records Tuesday after in-line July inflation data fortified bets that the Federal Reserve would deliver its first interest rate cut of 2025 next month. The S&P 500 rose 1.1%, the Nasdaq 100 climbed 1.3%, and the Russell 2000 soared 2.9%.

That marked the S&P 500’s first record close of August, with the tech-heavy Nasdaq 100 booking a record close as well.

All 11 S&P 500 sector ETFs went positive on the day, with communication services, tech, and materials leading the way.

Gains on the day were led by chip stocks NXP and On Semiconductor, which jumped 7.2% and 6.1%, respectively. Declines were led by law enforcement equipment maker Axon Enterprise, which fell 6.1%. Elsewhere…

Meta jumped 3.1%, ending the day at $790 — its highest closing price in history. The stock has been on a tear following a series of excellent earnings reports.

Shares of On Holding leapt 8.9% after the Swiss sneaker maker reported strong Q2 sales and offered a sunny outlook as the brand gains traction in the “RTO apparel” market.

D-Wave Quantum were up 6.5% to close the day. Sherwood News spoke with its CEO, following the quantum computing company’s Q2 sales beat last week, about its potential to expand into AI model training.

e.l.f. Beauty shares rose another 4.5% after Morgan Stanley upgraded shares of the popular cosmetics brand to “overweight” and hiked its price target to $134 from $114 on Monday.

Five Below shares also bounced 4.5% after Loop Capital hiked its rating on the stock from “hold” to “buy” and lifted its price target to $165.

Tilray shares climbed 3.2%, extending a rally, as investors continue to pile into the cannabis company, fueled by a report that President Trump is considering weed reform.

Circle shares ticked up 1.3%, paring back from a 15% premarket surge after the fintech firm’s first earnings report as a public company topped revenue estimates but missed on earnings per share.

Nvidia closed largely flat despite a new report from The Information saying that China’s internet regulator has ordered local tech companies to suspend their purchases of Nvidia chips.

Spirit Airlines shares plunged 40% after the discount airliner issued a dire warning about its ability to survive as a going concern without more cash. Rival airlines including Delta, American, Southwest, and JetBlue were all up amid this news and inflation data showing a jump in ticket prices for July.

Plug Power dipped 3.4% after the hydrogen fuel cell developer reported mixed second-quarter results after the bell on Monday, but said it plans to achieve gross margin breakeven in Q4.