Market Overview

On Tuesday, the market bet on a 100% probability of a Fed rate cut in September. Both $Dow Jones Industrial Average(.DJI.US)$ and $Russell 2000 Index(.RUT.US)$ Russell small-cap stocks rose for the fifth consecutive day. The Dow gained over 740 points, its best performance in over a year, hitting a new high, while $S&P 500 Index(.SPX.US)$ climbed for the third straight day to a new record. Capital rotation continued. The small-cap index jumped 3.5%, marking the fifth time since 1979 it has risen over 1% for five consecutive days, with a cumulative gain of over 11%, the best since April 2020. $NASDAQ 100 Index(.NDX.US)$ , after declining throughout the day, closed with a slight gain, and small-cap stocks outperformed the Nasdaq 100 to the greatest extent since 2011.

$Goldman Sachs(GS.US)$ rose over 2% to a new high on strong earnings, $Caterpillar(CAT.US)$ surged over 4%, and $UnitedHealth(UNH.US)$ led blue-chip stocks with a gain of over 6%. The SPDR Regional Banking ETF rose for the seventh straight day to a more than one-year high. Most star tech stocks fizzled out, with $NVIDIA(NVDA.US)$ down 1.6%.

Boosted by both “rate cut trades” and “Trump trades,” spot gold rose about 2%, approaching $2470 and hitting a new high, while US Treasury yields hit a four-month low. Oil prices fell for the third consecutive day.