IXIC: Nasdaq Composite Surges to Fresh Record on Inline Inflation, Upbeat Mood All Around

It was a Buy Everything day on Thursday with all three major US stock averages finishing at record closing highs.

🤑 Inflation Data Fuels Risk Trades

• The Nasdaq Composite index IXIC soared to a fresh record high on Thursday as traders’ enthusiasm went through the roof. Take every one of the big three indexes and this title could’ve stayed the same.
• Inflation data for August hit just as expected with 2.9% growth, which was the fourth month of rising price pressures, but it was inline with analyst estimates, so… buy up? Up from 2.7% in July, the printout signaled that maybe Trump’s tariffs are slowly trickling into consumer prices. Slowly.
• But that didn’t spook investors who were ready to bet on everything that was risky. And they did. All three major US indexes notched record highs that day.

💸 Records Here, Records There

• The Nasdaq added 0.7% for the cash session, closing at an all-time high of 22,043. This time around, the tech pack wasn’t the biggest gainer. The broader S&P 500 index added 0.9% to clock out at 6,587. The MVP award for the day goes to the Dow Jones Industrial Average.
• The blue-chip, 30-stock index added a whopping 617 points, or 1.4%, to sign off at 46,108, crossing the lofty milestone for the first time in its 129-year history.
• Why was the inflation report so important for traders from all walks of the market? Few reasons, but mostly it’s the conviction that the Federal Reserve will now head into next week’s meeting with a higher chance of a cut to interest rates.

🎙️ What’s Next?

• Central bankers will gather on September 16-17 to decide whether to raise, keep, or lower interest rates. At previous meetings and speeches, Fed boss Jay Powell has indicated his squad is increasingly leaning to a cut if labor market and economic conditions allow it.
• The August CPI print USCPI was the latest batch of numbers to tilt the scales and apparently, it cemented the baked-in expectations.
• Even though 2.9% is high above the Fed’s target of 2%, traders are already pricing in a quarter point interest-rate cut that would make money more affordable and provide liquidity all around the market. It’s so certain that a “buy the news, sell the rumor” warning should be slapped on all trading desks.