The U.S. stock market continued its robust rally into Wednesday afternoon trading, with major indexes pushing further into record territory. Investor optimism remains high, largely fueled by recent inflation data that has solidified expectations for impending interest rate cuts by the Federal Reserve. As of mid-afternoon on August 13, 2025, the market is extending gains seen earlier in the week, demonstrating resilience and a "Goldilocks" scenario where inflation cools enough to justify rate cuts without signaling an economic slowdown.
Major Index Performance
All three major U.S. stock indexes are trading higher, building on Tuesday's record-setting close. The Dow Jones Industrial Average (DJI) is up approximately 0.7%, hovering around its all-time high. The S&P 500 (SPX) has also added about 0.1% in afternoon trading, maintaining its record-high levels achieved earlier in the session. Similarly, the tech-heavy Nasdaq Composite (IXIC) is modestly higher by 0.1%, continuing its record run. These movements reflect a broad-based rally, with yesterday's gains of over 1% across all three indexes setting a positive tone for Wednesday's session.
The primary catalyst for this sustained upward momentum is the July Consumer Price Index (CPI) report, released yesterday. Headline inflation eased to 2.7% year-over-year, slightly below forecasts, while core CPI, which excludes volatile food and energy prices, ticked up to 3.1%. This mixed picture has been interpreted by markets as sufficient evidence for the Federal Reserve to begin its easing cycle, with futures markets now pricing in a near 100% probability of a 25-basis-point rate cut at the September 16-17 FOMC meeting. Treasury yields have also eased, with the 10-year Treasury yield recently at 4.24%, down from yesterday's close, further supporting the narrative of lower borrowing costs.
Sectoral Strengths and Weaknesses
Sector performance today reflects the prevailing market sentiment. Technology (XLK) and Communication Services (XLC) sectors continue to lead the charge, having been significant outperformers since early April. These sectors are benefiting from renewed investor interest and strong Q2 earnings, particularly from U.S. tech companies. Other broad sectors like Financials (XLF), Consumer Discretionary (XLY), Industrials (XLI), and Materials (XLB) also saw gains yesterday and are contributing to today's positive breadth. In the broader market, advancing issues are significantly outnumbering decliners, indicating widespread participation in the rally.
Upcoming Market Events
Investors are closely monitoring a relatively light economic data calendar today, with attention shifting to key releases later in the week. Tomorrow, Thursday, August 14, will bring the Producer Price Index (PPI) data, offering further insights into wholesale inflation. Additionally, weekly initial unemployment claims will be released, providing an update on the labor market. On Friday, the market will react to July's U.S. retail sales figures, retail sales excluding autos, and manufacturing production data, along with the University of Michigan's August consumer sentiment index. These reports will be crucial in shaping expectations for future Fed policy moves.
The second-quarter earnings season is in its final peak week, with several companies reporting today. Notable earnings releases expected include Cisco Systems (CSCO), Tencent Holdings (TCEHY), Bath & Body Works (BBWI), and Lulu's Fashion Lounge (LVLU). Beyond this week, some S&P 500 companies, such as Agilent Technologies (A), Synopsys Inc (SNPS), and MongoDB Inc. (MDB), have outlier earnings dates in the coming weeks that could impact market sentiment. Looking further ahead, the annual Jackson Hole Symposium later in August remains a significant event where central bank policy discussions could provide further market direction.
Major Stock News and Movers
Several individual stocks are making headlines today:
- CoreWeave (CRWV) shares plunged significantly in morning trading and remain under pressure this afternoon. The Nvidia-backed provider of AI computing reported a wider-than-expected second-quarter loss, despite revenue soaring 207% year-over-year and beating estimates. The company cited skyrocketing operating expenses, though its CEO noted rapid scaling to meet "unprecedented demand for AI."
- CAVA Group (CAVA) saw its stock collapse after the Mediterranean fast-casual chain reported weak Q2 revenue growth and lowered its same-store sales guidance for fiscal 2025.
- NXP Semiconductors (NXPI) emerged as a major gainer, with its stock surging 7.3%.
- In corporate acquisition news, Gildan Activewear (GIL) announced its acquisition of HanesBrands (HBI) for $2.2 billion. HanesBrands shares, which had climbed on Tuesday's rumors, fell today following the official announcement.
- The crypto exchange and CoinDesk owner, Bullish (BULLISH), made a strong trading debut today, with its shares soaring.
- Tech giants continue to be market drivers. Apple (AAPL), Nvidia (NVDA), and Tesla (TSLA) are leading the broader tech rally. Intel (INTC) also saw a notable gain of 5.3% after receiving praise from President Trump. Meta Platforms (META) is up nearly 3%. Other "Magnificent Seven" stocks like Amazon (AMZN) are also trading higher.
- In the semiconductor space, beyond Nvidia, AMD (AMD), Align Technologies (ALGN), and ON Semiconductors (ON) are all showing gains of 3% or more, benefiting from expectations of interest rate cuts.
- Reports also indicate that Perplexity has made an unsolicited $34.5 billion offer to acquire Google's Chrome browser, impacting Google (GOOGL).
- UnitedHealth (UNH) declared a dividend, a positive sign for investors.
The afternoon trading session reinforces the bullish sentiment that has characterized the market this week. With inflation data providing a clearer path for potential Fed rate cuts and strong corporate earnings continuing to emerge, investors appear confident in the market's trajectory, even as some individual stocks face headwinds. The focus now shifts to upcoming economic data and the continuation of earnings season to sustain this momentum.
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.