Major indices on the New York Stock Exchange closed higher for two consecutive days amid expectations for a September interest rate cut. In particular, small- and mid-cap stocks and traditional stocks showed strength, leading the market rise.
On the 13th (local time), the Dow Jones Industrial Average closed at 44,922.27, up 463.66 points (1.04%) from the previous session. The Standard and Poor's (S&P) 500 index rose by 20.82 points (0.32%) to 6,466.58, while the NASDAQ Composite Index closed at 21,713.14, up 31.24 points (0.14%).
There were no significant economic indicators or events on that day, but investors maintained a risk asset preference ahead of the Producer Price Index (PPI) to be announced on the 14th, following the Consumer Price Index (CPI) from July announced the previous day. According to the Chicago Mercantile Exchange (CME) FedWatch, the futures market for the federal funds rate reflected a 93.8% possibility of a 25 basis point (0.25 percentage point) cut in September. In the afternoon, the possibility of a 50 basis point (0.5 percentage point) 'big cut' emerged at 6.2%, somewhat lowering the probability of a 25 basis point cut.
The buying trend for small- and mid-cap stocks and traditional stocks, projected to benefit from interest rate cuts, was pronounced. The Russell 2000 index, focused on small- and mid-cap stocks, rose by about 2% on that day, following a 2.99% surge the previous day, showing close to a 5% increase over two days. Small and mid-sized corporations, which are relatively financially vulnerable, are expected to see significant performance improvements as capital borrowing costs decrease when interest rates fall.
The Dow index, centered on blue-chip stocks, maintained a robust gain of over 1% for two consecutive days. Most sectors rose, excluding technology and essential consumer goods, with particularly notable strength in materials and healthcare stocks.
U.S. Treasury Secretary Scott Bessent said in a foreign news interview, "It is possible to start with a 50 basis point cut in September and continue with a series of cuts," noting that "interest rates are excessively restrictive." In contrast, Chicago Federal Reserve Bank President Austan Goolsbee maintained a cautious stance, stating, "I do not want a re-acceleration of inflation."
Except for essential consumer goods, technology, and communication services, all sectors rose. Large technology stocks struggled, but Apple and Amazon both rose more than 1%, while Netflix and Palantir experienced a decline of around 1%. The Philadelphia Semiconductor Index rose by 0.90%, with AMD (5.37%), ASML, Qualcomm, and Lam Research showing strength.
Among individual stocks, Cava fell over 16% due to weak second-quarter sales and a downward revision in annual guidance, while AI infrastructure company CoreWeave plummeted 20% due to poor performance. The Chicago Options Exchange Volatility Index (VIX) recorded a decline of 1.63%, closing at 14.49.