The S&P 500 continued its rally in August 2025, hitting new record highs as investors remain hopeful for an imminent Federal Reserve interest rate cut. The technology-heavy Nasdaq also closed at fresh highs, buoyed by optimism following recent milder-than-expected inflation data.
Key technology firms including Nvidia, Apple, Microsoft, and Broadcom have shown mixed performance, with some profits tempered by concerns over lofty valuations and slowing economic momentum. Apple’s stock gained following reports of diversification into AI-driven robotics and home security products.
The rally was underpinned by expectations of a 25-basis-point Fed rate cut in September, though some investors and analysts caution that market optimism might be premature given underlying labor market and growth concerns. The upcoming producer price index (PPI) report and the upcoming Jackson Hole Federal Reserve symposium in late August are awaited as critical indicators of the central bank’s next moves.
Despite enthusiasm in large-cap stocks, small-cap indices like the Russell 2000 posted significant gains, benefiting from lower short-term borrowing costs. Overall, the market remains volatile as investors balance strong corporate earnings with lingering economic uncertainties.