S&P 500, Nasdaq Composite Close at Record Highs as Stocks Surge After CPI Report Boosts Rate-Cut Hopes

Traders Ramp Up Bets for Fed Rate Cuts in 2025

8 minutes ago

Market participants are even more convinced the Federal Reserve will cut interest rates in the coming months.

Following today’s benign inflation report, traders are now pricing in a greater than 94% likelihood that the Fed will cut its benchmark rate by a quarter point when the policy committee meets next in September. That’s up from the 86% chance that was priced in yesterday, according to the CME Group’s FedWatch tool, which forecasts rate movements based on fed funds futures trading data.

Another quarter-point cut is seen as likely at the October meeting of the Federal Open Market Committee. The chances of that are now seen at about 62%, up from the 55% likelihood that was being priced in on Monday.

Market participants are more divided on whether another cut is possible at the FOMC meeting in December. The FedWatch tool shows a 50% chance of a third cut at that last meeting of the year, up from 45% yesterday

Airline Stocks Take Flight

41 minutes ago

Airline-stock investors endured a bumpy ride to start the year. Things are a bit smoother now.

Shares of United Airlines (UAL), Delta Air Lines (DAL), American Airlines Group (AAL), Alaska Air Group (ALK), and JetBlue Airways (JBLU) all soared on Tuesday. The US Global Jets exchange-traded fund (JETS) also climbed, and is now roughly flat year-to-date after declining through the spring.

The July consumer price report released early Tuesday helped carriers stick the landing. It showed airfares rose 4% in last month, breaking a streak of declines. Jet fuel prices, meanwhile, have fallen to start August.1

Trade tensions, declining consumer confidence, weather conditions, and general uncertainty were cited as headwinds for the airline industry earlier in the year; the International Air Transport Association in June, trimmed its annual net profit estimate for the sector. The industry outlook now looks more stable, with carriers having mostly restored their earnings guidance after pulling the forecasts earlier this year.

There are outliers in the group. Spirit Airlines (FLYY), which emerged from Chapter 11 bankruptcy in March, on Monday said that the company continues to be affected by “adverse market conditions,” including weak domestic leisure travel in the second quarter and a “challenging” price environment, according to a company filing.2

Spirit Airlines’ management also issued a “going concern” warning in the filing, saying they had “substantial doubt” in the airline’s ability to continue operating within the next 12 months. Its stock was down 40% on Tuesday.

–Crystal Kim

Intel Levels to Watch After CEO Meets With Trump

1 hr 46 min ago

Intel (INTC) shares surged again Tuesday following a meeting between CEO Lip-Bu Tan and President Donald Trump on Monday.

The meeting came after Trump on Fridy demanded the immediate resignation of Tan, calling him “highly conflicted” over investments in Chinese firms. The president late Monday said on this Truth Social platform that the meeting was “very interesting” and that Tan’s success is “an amazing story.” Trump said that members of his cabinet would continue meeting with Tan in the coming days.

Trump’s meeting with the once-storied American chipmaker’s CEO followed news on Monday that AI chip giants Nvidia (NVDA) and Advanced Micro Devices (AMD) have agreed to pay 15% of their China chip revenues to the U.S. government in exchange for export licenses.

Intel shares were up 5% at $21.75 in late trading Tuesday, adding to the previous session’s gain of 3.5%. The stock is up about 9% so far this year, roughly in line with the performance of the S&P 500 in 2025 as investors asses the impact of Tan’s strategic moves, which include divesting assets, reducing employees, and reallocating resources. Tan took over the CEO role in March.

After breaking down from an ascending channel late last month, Intel shares retraced to a multi-month trading floor before finding buying interest around this key location.

More recently, the stock has continued to move higher, though the price remains below the 50- and 200-day moving averages and the relative strength index sits just below its neutral reading. However, it’s worth noting that the shares registered their highest volume in more than two weeks on Monday, indicating growing interest in the chipmaker’s stock.

Investors should watch key overhead areas on Intel’s chart around $22, $24 and $26, while also monitoring a major support level near $19.

Read the full technical analysis piece here.

–Timothy Smith

Another Top CEO Is Hearing It From Trump

3 hr 9 min ago

President Donald Trump leaned on a big bank’s CEO on Tuesday, a day after appearing to make peace with a chipmaking chief.

“David Solomon and Goldman Sachs refuse to give credit where credit is due,” Trump wrote on Truth Social. “They made a bad prediction a long time ago on both the Market repercussion and the Tariffs themselves, and they were wrong, just like they are wrong about so much else.”

Trump’s message marked his latest foray into public criticism of a high-profile executive. Just yesterday, Trump offered a generally upbeat take on a meeting with Intel’s (INTC) CEO Lip-Bu Tan, just a few days after calling for his resignation.

Tuesday’s statement appeared to reference a Sunday note from Goldman Sachs (GS), in which bank said that American consumers had absorbed a bit more than a fifth of the cost of Trump’s tariffs through June but could see that rise to above two-thirds “if the recent tariffs follow the same pattern as the earliest ones.” Goldman also said that tariffs, which have sustained core PCE inflation so far this year, could have an even larger effect on it in the second half.

Trump took his critique further, offering feedback on the career choices and hobbies of Goldman CEO David Solomon, who has moonlighted in music as a DJ. Goldman Sachs in an email to Investopedia declined to comment.

“I think that David should go out and get himself a new Economist or, maybe, he ought to just focus on being a DJ, and not bother running a major Financial Institution,” Trump wrote.

Solomon and Tan are just few of the executives Trump has called out publicly for various reasons. His willingness to spar with Elon Musk, the Tesla (TSLA) chief who was one of the biggest financial supporters of his last campaign, earlier this summer took a big bite out of the EV maker’s market cap, though it’s recovered since.

Goldman’s stock is up nearly 4% today.

–David Marino-Nachison

You May Have Fewer Options for Low-Cost Flights Soon

4 hr 6 min ago

If you plan on flying Spirit Airlines to save money on airfare, you may want to do it soon. 

In a regulatory filing Monday, the ultra-low-cost carrier warned it may run out of money within 12 months.

In March 2024, Spirit and JetBlue Airways (JBLU) called off their proposed merger after Biden administration regulators blocked the deal, and struggling Spirit filed for Chapter 11 bankruptcy in November. Spirit emerged from bankruptcy as a privately held company in March after rejecting merger overtures from Frontier Airlines parent Frontier Group Holdings (ULCC).

Investors evidently took the news to be beneficial for the prospects of Frontier, Sun Country Airlines (SNCY), also seen as ultra-low-cost carriers, and JetBlue. Their shares were all up by double-digit percentages in recent trading. The U.S. Global Jets ETF (JETS), which includes airline shares, was up more than 6%.

Spirit—which had an operating margin of negative 22.5% for 2024—has continued to hemorrhage money, and “management has concluded there is substantial doubt as to the Company’s ability to continue as a going concern within 12 months,” it wrote Monday.

The company has discussed the question of its ability to stay in business in past filings, but yesterday added the detail regarding the 12-month timing.

–Aaron Rennie

Inflation Report Boosts Prospect of Fed Rate Cut

5 hr 9 min ago

With the job market faltering and consumer prices growing less than expected, investors are increasingly betting the Federal Reserve is about to cut interest rates to boost the economy.

The government’s official report on July inflation didn’t deliver any nasty surprises  when released Tuesday morning. That led traders to price in higher chances that the Federal Reserve will start rolling back its anti-inflation interest rate hikes when its policy committee next meets in September.

After the report, there was a 94.1% chance the Fed would cut its interest rate by a quarter-point in September, up from an 85.9% the day before, according to the CME Group’s FedWatch tool, which forecasts rate movements based on fed funds futures trading data.

Fed officials are balancing the central bank’s dual mandate of keeping inflation in check while keeping employment high. The most recent round of economic data has shown the most red flags on the “employment” side of that mandate. Job growth has slowed to a crawl over the last three months, while “core” inflation has remained above the Fed’s goal of a 2% annual rate, but hasn’t accelerated alarmingly fast.

The Fed’s remedy for an economic slowdown is lower interest rates, which encourage borrowing and spending and, in turn, businesses to hire more workers. That’s the opposite of its playbook for defeating inflation, which is higher rates to slow the economy and bring supply and demand back into balance.

“Despite the increase in core inflation, we expect the Fed to cut rates next month as they pay closer attention to the weakening labor market,” Jeffrey Roach, chief economist for LPL Financial, wrote in a commentary.

Fed officials use monetary policy to influence the economy by manipulating the federal funds rate. The rate, which dictates the interest rate at which banks can borrow money, affects interest rates for all kinds of short-term loans.

In March 2020, the Fed chopped the fed funds rate to near-zero to boost the economy with easy money. Then, when inflation flared in 2022, the Fed ratcheted up interest rates to a two-decade high to counteract the price increases.

Fed officials began cutting rates in late 2024 as inflation fell toward the 2% goal, most recently cutting in December. Since then, central bankers have held off on further rate cuts, keeping the rate in a range of 4.25% to 4.5%, out of concern that President Donald Trump’s wide-ranging campaign of tariffs will set off a fresh round of inflation.

Trump has increasingly pressured the Fed to cut rates, lobbing insults and threats at Fed Chair Jerome Powell in recent months. Although Powell is one of 12 votes on the Federal Open Market Committee, the Fed chair is influential in its decisions. Trump appointed Powell in 2018, and former President Joe Biden gave him a second four-year term in 2022.

Trump has repeatedly demanded the Fed cut rates, arguing high interest rates are costing the government too much in interest payments on the national debt. Powell has resisted the pressure, saying the Fed should only make decisions based on its economic policy goals and should remain independent of political pressure.

Trump turned up that pressure Tuesday in a social media post threatening to investigate Powell over alleged cost overruns in an ongoing renovation project at the Fed’s headquarters.

“The damage he has done by always being Too Late is incalculable,” Trump posted. “Fortunately, the economy is sooo good that we’ve blown through Powell and the complacent Board. I am, though, considering allowing a major lawsuit against Powell to proceed because of the horrible, and grossly incompetent, job he has done in managing the construction of the Fed Buildings.”

Fed officials now face a dilemma. Key inflation indicators remain over 2% and are heading in the wrong direction, though not as quickly as some forecasters had feared. Meanwhile, the tariffs have disrupted job creation, stoking concerns about a possible recession and mass layoffs.

Fed policy can only address one of those problems at a time, at the risk of making the other worse.

Whether the Fed keeps the rate steady to control inflation, or cuts it to boost the job market, could hinge on next month’s round of economic data. Federal Open Market Committee officials will receive one more round of labor market and inflation reports before making their next decision.

“For the Federal Reserve, inflation is much further from its target than the unemployment rate, which is why we expect them to hold off rate cuts another few months,” Michael Pearce, deputy chief U.S. economist at Oxford Economics, wrote in a commentary. “However, another weak set of jobs data in August would force their hand early.”

–Diccon Hyatt

Circle Stock Rises as USDC Stablecoin Circulation Grows

5 hr 43 min ago

Circle Internet Group (CRCL) shares rose Tuesday morning as its first financial report since its initial public offering (IPO) came in better than expected on growing use of the USDC stablecoin.

The company that issues USDC reported second-quarter adjusted EBITDA of $126 million, more than $3 million above what analysts surveyed by Visible Alpha were looking for. Revenue gained 53% year-over-year to $658 million, also beating forecasts.

Circle noted that USDC circulation soared 90% year-over-year to $61.3 billion at the end of the quarter, and was up an additional 6.4% to $65.2 billion as of Aug. 10.

Co-founder and CEO Jeremy Allaire said the IPO in June “marked a pivotal moment—not just for our company, but for the broader adoption of stablecoins and the growth of the new internet financial system.” Allaire added that the company is seeing “accelerating interest in building on stablecoins and partnering with Circle across every significant sector of the financial industry.”

The company noted that the GENIUS Act passed by Congress and signed by President Donald Trump, which establishes a framework for the cryptocurrency sector, “strengthens Circle’s position as the leading regulated stablecoin issuer.”

Circle shares were recently up 6% at around $171. The stock has surged from its IPO price of $31 and opening level of $69 in its June 5 trading debut.

–Bill McColl

BigBear.ai Plunges on Uncertainty About Government Contracts

7 hr 16 min ago

BigBear.ai (BBAI) shares lost a quarter of their value Tuesday morning, a day after the artificial intelligence data analytics firm slashed its revenue outlook and withdrew its profit forecast on uncertainty about government contracts.

The company now anticipates full-year revenue in the range of $125 million to $140 million, down from its earlier estimate of $160 million to $180 million. Its previous guidance for adjusted EBITDA had been “in the negative single digit millions.”

CEO Kevin McAleenan said while BigBear.ai is optimistic about future investments and growth opportunities, “we have also seen disruptions in federal contracts from efficiency efforts this quarter, most notably in programs that support the U.S. Army, as they seek to consolidate and modernize their data architecture.”

Along with questions about Army contracts, the company expects increased spending in the second half of the year. 

In the second quarter, BigBear.ai posted a loss of $0.71 per share, about 12 times more than analysts from Visible Alpha were looking for. Revenue slumped 18% year-over-year to $32.5 million, also well short of forecasts.

Shares of BigBear.ai had entered Tuesday up nearly 60% this year.

–Bill McColl

On Holding Stock Soars as Sneaker Maker Boosts Outlook

7 hr 49 min ago

On Holding (ONON) shares surged more than 10% in early trading Tuesday after the high-end sneaker maker posted better-than-expected results and boosted its guidance on booming direct-to-consumer (DTC) sales.

The Switzerland-based firm backed by tennis great Roger Federer reported second-quarter revenue jumped 32% year-over-year to 749.2 million Swiss francs ($925.9 million), well above Visible Alpha forecasts.

DTC sales soared 47% to CHF308.3 million ($381.0 million), which the company credited to “continued focus on operational excellence, and favorable foreign exchange developments.” DTC made up 41% of total revenue, a new second-quarter record. Sales from its wholesale channel increased 23% to CHF441.0 million ($544.8 million).

Co-founder and Executive Co-Chair David Allemann said On is “playing the long game,” and that the performance “proves our strategy is working—from our diversified portfolio of iconic footwear franchises to our stellar growth in apparel and our global brand footprint.”

On now sees full-year revenue of CHF2.91 billion ($3.60 billion), compared to the earlier estimate of CHF2.86 billion ($3.53 billion), and gross profit margin in the range of 60.5% to 61.0%, versus the previous outlook of 60.0% to 60.5%.

Shares of On Holding entered Tuesday down nearly 17% year-to-date. 

–Bill McColl

Major Index Futures Tick Lower

9 hr 30 min ago

Futures tied to major U.S. stock indexes were down fractionally ahead of the release of closely watched inflation data this morning.

S&P 500 futures

Nasdaq 100 futures

Dow Jones Industrial Average futures