Nasdaq 100 and S&P500: Fed Speculation Lifts US Stocks Near Record Highs Today

S&P 500 and Nasdaq Edge Near Records as Traders Eye Fed Policy Shifts

U.S. equities advanced Thursday, with the S&P 500 and Nasdaq nearing record highs as rising speculation around Federal Reserve rate cuts reinvigorated risk appetite. Markets reacted to reports that former President Donald Trump may attempt to influence Fed leadership, potentially accelerating policy easing.

The S&P 500 hovered just 0.2% below its record, while the Nasdaq sat 0.5% off its all-time high. A ceasefire in the Middle East also supported sentiment. The Nasdaq 100 notched a fresh intraday record, driven by tech momentum and broader investor optimism.

Could Trump’s Fed Moves Tilt the Rate Cut Timeline?

Markets adjusted their rate expectations after a Wall Street Journal report indicated Trump is considering replacing Fed Chair Jerome Powell as early as September. While legally complex, the idea has stirred concern that political pressure could influence monetary policy.

Traders now assign a roughly 25% chance of a July rate cut, up from 12.5% last week, per CME FedWatch. Still, Chicago Fed’s Austan Goolsbee and San Francisco Fed’s Mary Daly both emphasized the Fed’s independence. Daly noted tariff impacts may not drive lasting inflation, which strengthens the case for easing. In contrast, Richmond Fed’s Thomas Barkin warned tariffs could pressure prices higher in the near term.

What Did the Latest U.S. Economic Data Reveal?

The Nvidia added 0.6% to hit a record showed a 0.5% contraction in Q1, worse than the 0.2% decline forecast. However, jobless claims declined, signaling continued labor market strength. Attention now turns to Friday’s PCE report—the Fed’s preferred inflation gauge—for confirmation on price trends and clues on the next policy step.

Which Sectors and Stocks Powered the Rally?

Nine of the 11 S&P sectors ended higher. Materials and energy outperformed with gains over 1.2%, supported by rising copper and oil prices. Real estate underperformed, down 0.9%. Banks climbed 0.7% after analysts projected up to $6 trillion in extra balance sheet capacity from proposed Fed rule changes.

In individual stocks, Nvidia added 0.6% to hit a record, while Nike rose 1.5% ahead of earnings. Copper producers saw strong upside: Freeport-McMoRan jumped 6.2% and Southern Copper gained 6.5%. On the downside, Equinix tumbled 9.2% after issuing underwhelming growth guidance.

What’s the Trading Focus Going Into the Weekend?

Market participants are bracing for the upcoming PCE inflation print, which could either validate or dampen rising rate cut expectations. With Fed speakers sending mixed signals and geopolitical risk easing, traders will be parsing inflation details closely for signs of policy clarity. A soft read could further support the rally, while a surprise uptick may reprice expectations into Q3.

More Information in our Economic Calendar.