US Stock Rally Extends as CPI Data and Tariff Pause Boost Market Optimism

The US stock rally extended on Wednesday, following sharp gains in the previous session as investors increasingly priced in multiple Federal Reserve rate cuts this year. The S&P 500 and Nasdaq 100 both rose around 0.3%, extending record highs, while the Dow Jones climbed over 300 points.

US Stock Rally Extends Amid Rate-Cut Hopes

A key catalyst was the recent CPI report, which showed only modest increases in goods prices. This eased fears that tariffs would reignite inflation, consolidating bets on a rate cut at the Fed’s upcoming September meeting. Several FOMC members had previously noted that tariff-related concerns had prevented earlier policy easing.

Markets were further lifted by President Donald Trump’s announcement of a 90-day pause on tariffs for Chinese goods, signaling continued support for trade stability and investor confidence.

Read More: US Initial Jobless Claims Rise to 226,000, Indicating Labor Market Softening

Sector Performance Highlights the Rally

The US stock rally saw gains led by healthcare and consumer cyclical sectors. Notable company moves included:

Brinker’s earnings report helped lift sector sentiment, while Cava’s weaker guidance offset some gains in consumer-focused stocks.

Market Implications and Outlook

The ongoing US stock rally reflects investor optimism on multiple fronts:

• Expectations of Fed rate cuts in response to moderating inflation ✅
• Temporary trade relief through the 90-day tariff pause 📉
• Solid earnings reports supporting sector-level momentum 💹

While the market remains sensitive to trade policy shifts and inflation dynamics, the combination of easing goods prices and supportive corporate results has strengthened risk appetite.

Analysts note that if inflation continues to remain manageable, and trade tensions do not resurface, the US stock rally could sustain momentum into the second half of 2025.

Are you positioning for the next phase of the US stock rally? Share your insights below or explore our latest updates on Fed policy, tariffs, and market moves.

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