S&P500 and US 30: Semiconductor Rally and Rate Cut Bets Drive Bullish Forecast Today

Wall Street Clocks Record Highs as Rate Cut Bets Hold Despite Hot CPI

Wall Street surged to new record highs on Thursday, with broad-based buying lifting all major indexes after August’s hotter-than-expected inflation data failed to shake expectations for Federal Reserve rate cuts. Traders held firm to bets that policy easing could begin as soon as next week.

The Dow Jones Industrial Average jumped 601.56 points to close at 46,092.48, up 1.32%. The S&P 500 added 52.25 points to finish at 6,584.29, a gain of 0.80%. The Nasdaq Composite rose 152.50 points to end at 22,038.56, up 0.70%, while the Russell 2000 led with a 1.48% surge to 2,413.32. All levels reflect data as of 4:00 PM EDT (Russell 2000 at 3:59 PM EDT).

Why Are Traders Shrugging Off Hotter CPI Numbers?

August CPI came in stronger than expected, with the largest annual inflation rise in seven months. Despite the data, traders stayed focused on a weaker labor market and cooler producer inflation, both reinforcing the likelihood of a dovish Fed.

Initial jobless claims climbed to 263,000 last week—marking the highest reading since 2021. This, along with a soft PPI report Wednesday, has solidified bets for a 25-basis-point cut in September, with futures now pricing in three straight quarter-point reductions by year-end.

Which Sectors and Stocks Are Driving the Gains?

Healthcare led the S&P 500, rising 1.5% to a four-month high. Centene jumped 11.5% after reaffirming its annual profit outlook and reporting stable Medicare quality ratings. Consumer discretionary also climbed 1.5%, with Tesla up 4% on no major news, helping lift the sector.

Micron Technology surged 10% after Citigroup raised its price target to $175. The Philadelphia Semiconductor Index rose 0.9%, logging its sixth consecutive gain. Communication services was the only sector in the red, down 0.2%.

How Is the AI Trade Holding Up After Oracle’s Surge?

Oracle’s explosive 36% rally on Wednesday revived AI enthusiasm, pushing up chipmakers and power utilities that support data centers. However, Oracle shares slipped 3% on Thursday, giving back a portion of those gains. Synopsys rebounded 10% after a steep drop in the prior session.

Delta Airlines was the S&P 500’s biggest laggard, falling 4% after maintaining its annual earnings forecast.

What’s the Market Outlook Heading Into the Fed Decision?

With major indexes posting strong gains and record closes, traders are entering next week’s FOMC meeting positioned for easing. Breadth remains strong—advancers led decliners by over 5-to-1 on the NYSE.

All eyes now turn to the Fed’s policy statement and dot plot. Any change in inflation or labor signals could quickly alter the rate path, but for now, traders remain confident that rate relief is coming.

More Information in our Economic Calendar.