Thanks primarily to the inflation report in the U.S. for July measured by consumer prices, which rose a moderate 2.7 percent year-on-year, expectations have strengthened that the Fed will lower interest rates in September, which fueled last week’s surge in stock prices on Wall Street and other global exchanges.
The Dow Jones index rose by 1.74 percent last week, to 44,96 points. At the same time, the S&P 500 jumped 0.94 percent, to 6,449 points, and the Nasdaq increased by 0.81 percent, to 21,622 points, during which they also reached new record levels.
The main stock indices on Wall Street thus achieved growth for the second consecutive week, driven by expectations that the Fed might restart the monetary easing cycle by reducing the interest rate by 25 basis points in September.
The U.S. central bank last lowered borrowing costs in December, announcing that U.S. tariffs could increase price pressures. However, recent weakness in the labor market and signs that tariff-induced inflation has not yet reflected in overall consumer prices have convinced investors of a potential easing of monetary policy next month. U.S. Treasury Secretary Scott Bessent stated on Wednesday that he believes an aggressive interest rate cut of half a percent is possible, given the weak employment figures.
