The stock market is up today largely due to investors' optimism about potential Federal Reserve interest rate cuts expected in September, strong corporate earnings particularly in the technology and AI sectors, and solid economic data such as rising GDP and corporate cash flows. Market participants are encouraged by Nvidia's robust earnings that highlight ongoing demand for AI chips, along with other strong earnings reports from companies like Affirm, Autodesk, and Ulta, which support the momentum in growth and technology stocks. Additionally, futures pricing indicates an 85% chance of a 25 basis points rate cut next month, further fueling the bullish sentiment despite some inflation pressures remaining above target. This combination of strong corporate performance and anticipated easier monetary policy is driving the markets to new record highs, with the S&P 500 registering its 20th record close of the year recently and major indexes showing solid monthly gains for August 2025.
