Stocks jump Wednesday after S&P 500 and Nasdaq hit records

U.S. stocks were mostly higher in the late morning on Aug. 13, fueled by rising speculation about interest rate cuts in the weeks ahead.

The Dow Jones Industrial Average jumped 337 points or 0.8% to trade near 44,796, while the broad S&P 500 Index tacked on 11 points or 0.2%, to about 6,457. The Nasdaq Composite was up 7 points, near 21,689.

After a tame July inflation report, expectations jumped for a rate cut at the Federal Reserve's policy meeting in September. The CME FedWatch tool that tracks the market's expectations for a rate move at each Fed meeting suggests a more than 94% chance of a Fed rate cut.

The benchmark 10-year U.S. Treasury note lost about 7 basis points to trade near 4.23% in the morning.

Would a quarter-point rate cut be enough?

The Fed should consider steep rate cuts, Treasury Secretary Scott Bessent suggested in a Bloomberg News interview. “If you look at any model,” he said, “we should probably be 150, 175 basis points lower.”

The CME FedWatch tool shows the market overwhelmingly expects a cut of only 25 basis points in September.

Two days after the Fed left rates unchanged on July 30, revised data showed weaker job growth for May and June than official figures had previously indicated. Bessent also suggested that central bank officials might have cut interest rates in June or July if that information had been available then.

Separately, Bessent said he was “hopeful” Stephen Miran would be approved by the Senate to fill former Governor Adriana Kugler's seat on the Federal Reserve Board by the September meeting. Kugler resigned on last week, and Miran would finish out her term.

Corporate news

Cava missed second-quarter revenue growth estimates and lowered its full-year same-store sales forecast. Shares of the restaurant chain slid 16% in the morning.
Coreweave topped second-quarter sales expectations and increased its third-quarter and full-year revenue outlook above the Street's view. Its adjusted net loss widened significantly from a year ago and missed analysts' expectations. The stock fell nearly 19%, one day before its IPO lockup was due to expire.
Stablecoin issuer Circle said it plans to sell 10 million Class A shares to the public, 2 million of which will be offered by the company and the rest from shareholders. Cryptocurrencies have surged in recent weeks: Ethereum is up nearly 60% over the past month, and Solana has gained about 22%. Meanwhile, cryptocurrency exchange Bullish made its stock market debut Wednesday with the ticker BLSH.
Brinker International, parent company of Chili's and Maggiano's, posted quarterly results that beat analyst expectations. Shares were nearly 1% higher late morning on Wednesday.
Tencent Holdings shares rose nearly 5% after the company announced a revenue beat.