Dow Jones Soars to Record High Amid Economic Optimism and Fed Rate Cut Expectations

CNBC Daily Open: Dow jumps 700 points, gold hits record, HSBC new CEO

Dow scores another record The Dow Jones Industrial Average rose more than 700 points to close at another record high as the bull run appeared to broaden. The small cap-focused Russell 2000 rose for the fifth straight day, rising 3.5%. The S&P 500 gained 0.64%, while the Nasdaq inched up 0.2% as tech was left out of the rally. The yield on the 10-year Treasury slipped and U.S. oil prices also declined. 100% certainty Traders are now certain that the Federal Reserve will cut interest rates by September, with a 93.3% probability of a quarter percentage point cut and a 6.7% probability of a half percentage point cut. This certainty stems from the recent consumer price index update, which showed annual inflation slowing to 3%, the lowest in three years. A month ago, the odds of a September rate cut were only around 70%. Gold hits fresh highs Gold prices surged to a record Wednesday on rising expectations of an interest rate cut in September. Investors are turning to gold amid softer inflation data and dovish comments from Federal Reserve Chair Jerome Powell, boosting the likelihood of rate cuts this year. Spot gold prices rose 0.5% to $2,482.29 per ounce, hitting an all-time high according to LSEG data. Gold futures climbed to $2,478.4 an ounce. Gold has rallied this year as central banks bought the precious metal as geopolitical risks increased interest in safe-haven assets. You can read more here as Ray Dalio, the founder of the world's largest hedge fund Bridgewater Associates, explains the appeal of gold. New CEO Global lender HSBC has named Georges Elhedery as its third CEO in less than eight years. Elhedery, currently the CFO, will replace outgoing head Noel Quinn starting Sept. 2. Quinn unexpectedly resigned in April after more than five years leading the London-based bank through the pandemic and trade tensions between China and the West. Quinn has been with the bank for 37 years and was appointed interim CEO in 2019. Elhedery's appointment as CEO comes less than two years after he was promoted to chief financial officer in January 2023. Taiwan falls on Trump comments The Taiwan Weighted Index fell 1% after former President Donald Trump said Taiwan should pay for its own defense. Shares of Taiwan Semiconductor Manufacturing Corp dropped 2.3%. Elsewhere in the Asia-Pacific region, Japan's export-heavy Nikkei 225 declined on reports authorities spent 6 trillion yen ($37.9 billion) propping up the yen. Australia's S&P/ASX 200 rose 0.73% to hit an all-time high, while South Korea's Kospi slipped. Hong Kong's Hang Seng index and mainland China's CSI 300 were little changed. [PRO] Top AI pick Bank of America reiterated a buy rating on a leading chipmaker, citing the company's strong position in the AI market. Analyst Vivek Arya expects AI to become a $30 billion to $50 billion opportunity for the company over the next three to five years, driven by strong demand from both cloud vendors and consumer-facing AI platforms.

CNBC Daily Open: Dow soars 700 points to record close

Dow scores another record The Dow Jones Industrial Average rose more than 700 points to close at another record high as the bull run appeared to broaden. The small cap-focused Russell 2000 rose for the fifth straight day, rising 3.5%. The S&P 500 gained 0.64%, while the Nasdaq inched up 0.2% as tech was left out of the rally. The yield on the 10-year Treasury slipped and U.S. oil prices also declined. 100% certainty Traders are now certain that the Federal Reserve will cut interest rates by September, with a 93.3% probability of a quarter percentage point cut and a 6.7% probability of a half percentage point cut. This certainty stems from the recent consumer price index update, which showed annual inflation slowing to 3%, the lowest in three years. A month ago, the odds of a September rate cut were only around 70%. Gold hits record high Gold prices surged to a record on rising expectations of an interest rate cut in September. Investors are turning to gold as a safe haven amid softer inflation data and dovish comments from Fed Chair Jerome Powell, boosting the likelihood of rate cuts this year. Gold futures settled up 1.6% higher at an all-time closing high of $2,467.8 per ounce. The precious metal also reached a fresh intraday record high of $2,474.5 during the session. Spot gold mirrored this surge, jumping 1.9% to hit an all-time high of $2,468.68 an ounce, according to LSEG data dating back to 1968. You can read more here as Ray Dalio, the founder of the world's largest hedge fund Bridgewater Associates, explains the appeal of gold. Bank of America soars Shares of Bank of America rose more than 5% after second-quarter revenue and profit topped expectations. Although net interest income fell 3% to $13.86 billion, as expected, the bank said it expects the measure to rise to $14.5 billion in the fourth quarter. NII, a measure closely watched by shareholders, is the difference between what a bank earns on loans and what it pays depositors for their savings. Last week, JPMorgan Chase, Wells Fargo and Citigroup each topped expectations for revenue and profit, a streak continued by Goldman Sachs on Monday and Morgan Stanley on Tuesday, helped by a rebound in Wall Street activity. Global inflation threat A second term for former President Donald Trump could spark global inflation, analysts warn. Trump's America-first policies, characterized by high tariffs and low taxes, may drive up costs worldwide. "Compared to 2016, when inflation had been low forever and inflation expectations were low ... 2024, 2025 is going to be very different," Michael Metcalfe, head of macro strategy at State Street Global Markets, told CNBC's "Squawk Box Europe." "The level of inflation is higher, inflation expectations are higher, and we're still in this inflation mindset." [PRO] Top AI pick Bank of America reiterated a buy rating on a leading chipmaker, citing the company's strong position in the AI market. Analyst Vivek Arya expects AI to become a $30 billion to $50 billion opportunity for the company over the next three to five years, driven by strong demand from both cloud vendors and consumer-facing AI platforms.

The Dow surged to a record high because investors think rate cuts are coming in two months

The Dow Jones Industrial Average surged by 500 points on Tuesday morning, reaching a new record high, as investors are now certain that the Federal Reserve will cut a key interest rate by September. As per CME FedWatch, a tool created by CME Group that analyzes the actions of the Federal Open Markets Committee (FOMC), there is a 93.3% probability that the Fed will lower its key rate by a quarter percentage point to a range of 5% to 5.25% in September, down from the current range of 5.25% to 5.5%. According to the tool, there is a 6.7% chance that a half-percentage-point decrease will come in September. This takes into account the belief held by some traders that the Fed will announce the cut at its meeting at the end of July and then again in September. The probability numbers came after the favorable CPI report in June which indicated that inflation is cooling off. In mid-day trading, the Dow surged by 594 points, or 1.5%, to 40,806. The S&P 500 jumped 0.4%, while the Nasdaq dipped 0.1%. It seems that investors put their bets on small-cap stocks, pushing the Russell 2000 to a new 52-week high with a 2% jump. Meanwhile, AI stocks were down Tuesday morning, including Nvidia, Advanced Micro Devices, Super Micro Computer, Broadcom, and Micron Technology, all losing around 2%. Moreover, Bank of America and Morgan Stanley have released their earnings reports. Bank of America's stock surged by over 4% after earnings surpassed analysts' forecasts, while Morgan Stanley's stock increased by just over 1.5%.

Dow Jones Today: US Stocks Rise in Early Trading as Dow Industrials Surge to New Record High

Stephen Wisnefski is the Executive Editor of News at Investopedia. He has more than two decades of experience as a journalist and newsroom leader, including 25 years at Dow Jones and The Wall Street Journal. U.S. stocks gained ground in early trading Tuesday, with the Dow Jones Industrial Average surging to a new record high, as earnings seasons kicks into high gear. The Dow, which closed at its first record high in two months on Monday, rose 0.8%. The S&P 500, which is just shy of a record of its own, gained 0.4%, while the Nasdaq Composite added 0.3% Shares of UnitedHealth (UNH) were leading the Dow gainers, rising more than 3%, after the insurer reported better-than-expected quarterly earnings. Bank of America (BAC) shares were up nearly 3% after a strong earnings report, while Morgan Stanley (MS) was down about 1% after releasing results. Major stock indexes have been supported in recent weeks by gains for large cap technology stocks and expectations the Federal Reserve will cut its influential fed funds rate as soon as September. As earnings reports roll out, investors will be getting fresh views on how companies are navigating an environment of continued high interest rates and slowing economic activity. Among big tech names, Apple (AAPL) shares, which hit a record high on Monday, were up again Tuesday, as were shares of Tesla (TSLA), which have closed higher in 13 of the past 14 sessions. AI investor tech darling Nvidia (NVDA) edged higher. Treasury yields, which have fallen in recent weeks as expectations of a Fed rate cut have grown, were trading around 4.20%, down from the day before but higher than earlier Tuesday, after retail sales data came in stronger than expected. Market participants are closely monitoring economic data releases, as well as comments from Federal Reserve officials, for clues on the timetable for interest rate cuts. On Monday, Fed Chair Jerome Powell reiterated that progress has been made in the fight against inflation, noting that annual inflation doesn't need to fall to the Fed 2% target before the central bank starts cutting rates. Meantime, investors are watching developments at the Republican National Convention, after former President Donald Trump named Ohio senator J.D. Vance as his running mate for the presidential election.

Dow Sets All-Time High For Third-Straight Day

The Dow Jones Industrial Average set another record on Tuesday, surging to an all-time intraday high for the third-straight session as markets respond positively to prospect of the Federal Reserve cutting interest rates. Get Forbes Breaking News Text Alerts: We're launching text message alerts so you'll always know the biggest stories shaping the day's headlines. Text "Alerts" to (201) 335-0739 or sign up here. The Dow passed 40,000 for the first time earlier this year, following a surge for Walmart's shares that peaked at an all-time high. It took just over three years for the index to reach that milestone after eclipsing 30,000 in November 2020. The S&P 500 has set several all-time intraday highs in recent weeks, including a record 5,666.94 set on Monday, and rose again slightly (0.3%) on Tuesday. The index is on pace to break its record close of 5,633.91 set last week. The Dow's record-setting streak follows inflation falling to its lowest point in a year last week, which market analysts believe could lead to interest rates being cut as soon as September. The Fed began hiking rates in 2022, part of a gambit to quell inflation at the cost of raising borrowing costs and potentially slowing economic growth. Markets have responded positively to consumer prices falling month-to-month for the first time in four years and wholesale prices increasing slightly higher than analyst projections. Optimism surrounding artificial intelligence has caused the Dow, which relies on share prices rather than market capitalization, the S&P 500 and Nasdaq to swell in recent months.