Nasdaq Composite, S&P 500 Break Records as Fed Seen Almost Certain to Restart Policy Easing in September

12:21 PM EDT, 08/13/2025 (MT Newswires) -- US equity indexes edged up in midday trading on Wednesday as a decline in both government bond yields and the dollar validated a 99.9% probability of the Federal Reserve lowering interest rates in September.

The Nasdaq was up 0.1% to 21,693.1, after hitting a record 21,803.75 intraday, extending gains from Tuesday, when July's inflation data was perceived to be conducive for a Fed rate cut next month. The S&P 500 rose 0.1% to 6,453.5, after touching an all-time high of 6,480.28 earlier in the session. The Dow Jones Industrial Average climbed 0.8% to 44,446.8, hovering close to its peak of 45,073.63.

Healthcare and consumer discretionary led the gainers intraday, while industrials and consumer staples were among the decliners.

The odds of a 25-basis-point cut in September rose to 99.9% as of Wednesday afternoon, versus 94% a day ago, according to the CME FedWatch Tool. The likelihood stood at 57% a month ago.

For investors, the concern was that a hot July consumer price index would have removed the prospects of a September cut altogether, particularly if the tariff impact became more obvious, according to a Wednesday note from Deutsche Bank.

"So, the fact that CPI was broadly as expected was met with relief, leading to equity gains and tighter credit spreads as investors became increasingly confident about another rate cut," the note said.

US Treasury yields fell intraday, with the 10-year yield down six basis points to 4.23% and the two-year rate sank 5.2 basis points to 3.68%.

The ICE US Dollar Index fell 0.4% to 97.72, trading close to its lowest this year.

West Texas Intermediate crude oil futures slumped 1.8% to $62.03 a barrel.

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