New York Stock Market Hits All-Time Highs for Two Consecutive Days on Expectations of September Rate Cut

Secretary Besant urges Fed for a "0.5%p cut in September"

With expectations for a September Federal Reserve Board rate cut reaching a peak, the S&P 500 and Nasdaq both set new record highs on the New York stock exchange on the 13th (local time).

At 10:10 a.m. Eastern Standard Time, the S&P 500 rose 0.41% to 6,473 points. The Nasdaq also gained 0.3% to reach 21,751 points, up 0.4%. The Dow Jones Industrial Average surged 0.9% to 44,745.

The 10-year Treasury yield fell by 5 basis points (1bp=0.01%) to 4.238%, while the 2-year yield also decreased by 5bp to 3.683%.

Amid prospects of a rate cut, the Bloomberg Dollar Spot Index declined by 0.2%, weakening against most major currencies.

NVIDIA dropped by over 1%, but Advanced Micro Devices (AMD) jumped more than 4%, leading gains among tech stocks. Tesla, Apple, and Oracle also each rose by 1%.

Bitcoin climbed 0.3% to trade at $120,590.48, while Ether advanced 2.1% to $4,719.15.

As optimism took hold following the July inflation report, Secretary Scott Besant's demand to the Fed for a 0.5%p rate cut in September pushed expectations to a high point. According to the CME Group's FedWatch Tool, the probability of a September rate cut reached 99%.

In an interview with Bloomberg TV, Secretary Besant remarked that had Fed officials been aware of the revised labor market data (showing a sharp decline), they would have cut rates both at the July and the June meetings.

Besant argued that a 0.5% rate cut should take place in September, with the US benchmark interest rate falling at least 1.5 percentage points below its current 4.25%~4.5% range.

On the 14th, the Producer Price Index (PPI) report will be released. This comes ahead of the Fed's Jackson Hole meeting, held August 21–23, and could help shape expectations for the next policy direction.

Since the early April low—following Trump’s announcement of reciprocal tariffs—the S&P 500 has climbed about 30%.

Ulrike Hoffmann-Burchardi of UBS Global Wealth Management stated, “As the US labor market worsens, we expect the Fed to resume rate cuts next month, lowering a total of 100 basis points by reducing 25bp at every meeting through January 2026.”

She noted that the Fed's easing policy favors stocks, investment-grade bonds, and gold.

Not all investors are convinced. Warren Pies, co-founder of 3Fourteen Research, pointed out, “Despite concerns over the labor market and economic growth outlook, the market is overlooking these risks.”

Guest Reporter Jung-A Kim kja@hankyung.com