Dow soars 700 points to record close

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Dow Jones hits new high
this Dow Jones Industrial Average Increased by more than 700 points Prices closed at another new high as the bullish market appears to be expanding. Mainly small stocks Russell 2000 It rose for a fifth consecutive day, rising 3.5%. this S&P 500 Index rose 0.64%, while the Nasdaq edged up 0.2% as technology stocks were excluded from the gains. 10-Year Treasury Bond Yield Ministry of Finance slipped and US oil prices Also refused.

100% certainty
Traders are now convinced Fed to cut interest rates in September, the probability of a quarter percentage point reduction is 93.3%, and the probability of a half percentage point reduction is 6.7%. This certainty comes from the latest Consumer Price Index update, which showed annual inflation slowing to 3%, the lowest level in three years. A month ago, the probability of a rate cut in September was only about 70%.

Gold hits record high
gold price Interest rate cut expectations rise, hitting record high in September. Investors are turning to gold as a safe haven amid weak inflation data and dovish comments from Federal Reserve Chairman Jerome Powell raising the possibility of a rate cut this year. gold futures It closed up 1.6% at a record high of $2,467.8 an ounce. The precious metal also hit a new intraday record high of $2,474.5 during the session. spot gold Bitcoin prices mirrored the surge, rising 1.9% to hit an all-time high of $2,468.68 an ounce, according to LSEG data dating back to 1968. Gold's appeal explained.

Bank of America shares soar
shares Bank of America Then it rose more than 5% Second-quarter revenue and profit beat expectations. Although net interest income fell 3% to $13.86 billion as expected, the bank said it expected the metric to increase to $14.5 billion in the fourth quarter. NII, a metric closely watched by shareholders, is the difference between a bank's loan income and the amount it pays out to depositors on savings. last week, JPMorgan, FuGuo bank and Citigroup Each beat revenue and profit expectations, consecutively Goldman Sachs Monday and Morgan Stanley Tuesday, benefiting from a rebound in activity on Wall Street.

global inflation threat
Former President Donald Trump's second term could be spark global inflation, analysts warned. Trump’s America First policy, characterized by high tariffs and low taxes, could drive up global costs. Michael Metcalfe, head of macro strategy at State Street Global Markets, told CNBC’s “Squawk Box Europe”: “Compared to 2016, when inflation was at a very low level, Inflation expectations are also low… 2024 and 2025 are going to be very different. “Inflation levels are higher, inflation expectations are higher, and we're still in this inflationary mindset. “

(PRO) Top AI Selection
Bank of America reiterates buy rating on a leading chip maker, citing Occupy a strong position in the artificial intelligence market. Analyst Vivek Arya estimates that artificial intelligence will create a $30 billion to $50 billion opportunity for companies in the next three to five years, driven by strong demand from cloud providers and consumer-facing AI platforms.

Small-cap stocks surge, Russell 2000 Index Reaching highest level since January 2022 and rose for a rare five consecutive days. The index is up nearly 12% this month, while the S&P 500 is up 4% and the Nasdaq is up a similar amount. The rally was fueled by the prospect of lower interest rates as inflation approaches the Fed's target, potentially broadening the economic recovery.

This may come as a relief to seasoned investors who were worried about the market's reliance on a handful of tech stocks during the 21-month bull market.

David Kostin, chief U.S. equity strategist at Goldman Sachs, told CNBC’s “Squawk on the Street” that he expected “will be expanded over the next six monthsBecause “the market itself as an index is up 20% year to date; the typical S&P 500 stock index is up 7%. So the gap is largely driven by five major companies.”

Kostin also explained why rate cuts may benefit small-cap companies: “The Fed is expected to start cutting interest rates in September, and it may start cutting interest rates in December. Historically, this has been good for small-cap companies, basically , 30% of their borrowings are in floating rate, so lower interest rates, lower interest payments, higher earnings expectations would be an area where you specifically want to consider the Russell 2000 or expand the scope.

Christopher Harvey, head of equity strategy at Wells Fargo Securities, is more skeptical of the rotation. “We are not against rotation“, Harvey told CNBC on Monday. “We're just waiting.

“Until we start to see that Nike, Delta, Walgreens are not going to fall because of the bad news — we don't believe in the rotation. We want people to believe that the numbers are going to be higher and things are going to get better.” But now. The bad news for us is bad news, which tells us that this rotation may not be sustainable.

We may be at that turning point. Six major banks—— Bank of America, JPMorgan, FuGuo bank, Citigroup, Goldman Sachs and Morgan Stanley -'s revenue and profits beat expectations, sending shares higher after being ignored during the bull market. when not loved Regional banks struggle in post-pandemic rate hike cycleCNBC's Jesse Pound writes that even if profits aren't huge in the second quarter, their stock could rise further.

—CNBC’s Brian Evans, Alex Harring, Lisa Kailai Han, Yun Li, Jesse Pound, Sarah Min, Karen Gilchrist, John Melloy and Hugh Son contributed to this report.