The U.S. stock market experienced a robust rally on Tuesday, August 12, 2025, with major indexes closing significantly higher and both the S&P 500 and Nasdaq Composite reaching new all-time highs. Investor sentiment was overwhelmingly positive following the release of July's Consumer Price Index (CPI) report, which showed inflation holding steady and reinforcing expectations for potential interest rate cuts by the Federal Reserve. This optimistic outlook fueled broad-based gains, particularly in the technology sector.
Market Index Performance
The Dow Jones Industrial Average (DJI) surged by 449.85 points, or 1.02%, to close at 44,424.94. The S&P 500 (SPX) rose by 37.43 points, ending the day at 6,410.94, marking a 0.59% increase and hitting a new record close since July 28. The technology-heavy Nasdaq Composite (IXIC) continued its impressive run, climbing 113.77 points, or 0.53%, to finish at 21,499.17, achieving its third record close in the past four sessions. This strong performance contrasts with Monday's slightly lower finish for major indexes, which had followed their biggest weekly gains since June.
The positive momentum was largely attributed to the July CPI data, which showed annual inflation remained at 2.7%, slightly below economists' expectations of 2.8%. While core inflation, excluding volatile food and energy prices, accelerated to 3.1%—its highest pace in half a year, largely linked to tariffs—the market interpreted the overall report favorably. This data significantly increased the probability of a Federal Reserve rate cut in September, with market participants now assigning a 90-94% chance, up from around 86% just a day prior. Lower interest rates are generally seen as a boost for investment prices and the broader economy, making borrowing cheaper for consumers and businesses.
Upcoming Market Events
Investors will continue to monitor a busy week of economic data releases. The Producer Price Index (PPI) report is scheduled for August 14, providing further insights into inflationary pressures at the wholesale level. Additionally, retail sales and consumer sentiment data are expected, which will offer a clearer picture of consumer spending and confidence.
Looking further into August, the highly anticipated Jackson Hole Symposium will be a key event, where central bankers and economists gather to discuss monetary policy. The OPEC-JMMC Meetings are also on the calendar, which could influence global oil prices. The Atlanta Fed's GDPNow model, which provides a real-time estimate for GDP growth, is set for its next update on Friday, August 15. The Federal Reserve's next policy meeting concludes on September 17, and officials will be closely scrutinizing upcoming inflation and jobs reports before making any decisions on interest rates.
Major Stock News and Developments
Several companies made headlines with significant stock movements and corporate announcements:
- Apple (AAPL) saw a notable surge, contributing to the Nasdaq's rally, after announcing plans to invest $600 billion over four years in U.S. manufacturing. This news came just before President Trump's statement about imposing a 100% tariff on imported semiconductors, with an exemption for companies building in America, potentially encouraging more tech firms to shift production domestically.
- Nvidia (NVDA) continues to be a major player in the AI boom, with its stock climbing 38.6% year-to-date in 2025. The company's CEO has reportedly navigated trade tensions with a "last-minute deal" with the White House, and President Trump has signaled openness to Nvidia selling scaled-back Blackwell chips to China.
- Circle Internet Group (CRCL) shares rose significantly after its first earnings report as a publicly traded company since its June IPO. The company reported better-than-expected second-quarter adjusted EBITDA and revenue, driven by the growing adoption of its USDC stablecoin.
- TKO Group Holdings (TKO) experienced a substantial 10.23% increase in its stock price following a $7.7 billion, seven-year deal with Skydance's Paramount. This agreement shifts UFC content distribution to streaming on Paramount+ and select simulcasts on CBS, moving away from the traditional pay-per-view model to boost accessibility and fan engagement.
- Hanesbrands (HBI) shares skyrocketed, gaining approximately 37%, amidst reports that Gildan Activewear (GIL) made a nearly $5 billion bid to acquire the underwear company. Conversely, Gildan's shares saw a decline.
- On the downside, BigBear.ai Holdings (BBAI) shares plunged between 24% and 28% after the AI analytics firm reported second-quarter 2025 results and guidance that badly missed estimates. The company cited challenges in federal government contracting, leading to a cut in its full-year revenue outlook.
- Cardinal Health (CAH) saw its shares decline by 9-12.4% despite reporting a stronger profit for the latest quarter than analysts expected. The healthcare services provider's revenue fell short of forecasts, and the market's high expectations, following a 33.3% year-to-date surge in its stock, contributed to the sell-off. The company also announced a $1.9 billion acquisition.
- Pony AI (PONY) shares dipped 10% despite a strong 76% year-over-year surge in Q2 revenue, as investors focused on a wider adjusted net loss and a 75% jump in operating expenses driven by heavy investments.
- AST SpaceMobile (ASTS) shares surged 20% despite missing Q2 earnings, as investors reacted positively to the company's plans to deploy intermittent service in the United States by the end of 2025, with expansion to the UK, Japan, and Canada scheduled for Q1 2026.
- Micron Technology Inc. (MU) shares gained 4.1% after the company raised its fourth-quarter fiscal 2025 earnings per share and revenue guidance.
- AAON Inc. (AAON) shares plunged 10.5% after reporting Q2 2025 adjusted earnings that missed the Zacks Consensus Estimate.
- Legend Biotech Corp. (LEGN) shares fell 2.1% after posting a wider Q2 2025 adjusted loss per share than anticipated.
- Franco-Nevada Corp. (FNV) rose 2.4% after the company posted Q2 2025 adjusted earnings that beat analyst expectations.
- Sea Limited (SE) climbed 18.16% on the back of strong Q2 results, with e-commerce sales rising 33.7% and Digital Financial Services revenue jumping 70%.
- On Holding (ONON) shares jumped after the high-end sneaker maker reported better-than-anticipated results and raised its outlook, driven by strong direct-to-consumer sales growth.
Earnings Announcements After Market Close
As the trading day concluded, several companies were slated to release their second-quarter 2025 financial results, which could influence trading in the coming sessions. These include:
- Inovio Pharmaceuticals (INO)
- Luminar Technologies (LAZR)
- Hyliion Holdings (HYLN)
- Rigetti Computing (RGTI)
- CAVA Group, Inc. (CAVA)
- CoreWeave, Inc. Class A (CRWV)
CoreWeave (CRWV) had already seen its stock climb nearly 8% yesterday in anticipation of its earnings report. AmpliTech Group (AMPG) also announced it would release its Q2 2025 earnings report after market closing on August 14th.
Overall, August 12, 2025, proved to be a strong day for U.S. equities, buoyed by favorable inflation data and continued optimism surrounding potential Federal Reserve policy adjustments. The tech sector, in particular, demonstrated significant strength, driving the major indexes to new record highs.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.