US stock market rallies as S&P 500 and Nasdaq hit fresh records amid earnings boom and Fed rate cut hopes

Economic Times

2 days ago

U.S. stock markets continued their upward climb on Friday, July 25, 2025, as the S&P 500 and Nasdaq Composite pushed into new record territory, while the Dow Jones hovered just below its all-time highs. Investors remain bullish, fueled by a powerful combination of strong corporate earnings, renewed optimism over potential Federal Reserve rate cuts, and positive sentiment around upcoming U.S. trade deals. As tech and AI-related stocks maintain their momentum and inflation cools further, Wall Street seems to be riding a wave of cautious confidence.
U.S. Stock Market stays positive amid strong earnings and fed speculation- On Friday, July 25, 2025, U.S. stock markets continued their upward momentum, with the S&P 500 and Nasdaq Composite inching further into record-high territory. The Dow Jones Industrial Average, while not yet setting a new record, also showed modest gains, supported by investor optimism surrounding strong corporate earnings, easing inflation, and increasing speculation about a potential Federal Reserve interest rate cut. This continued bullish sentiment reflects a combination of solid economic data, corporate performance that's exceeding expectations, and a supportive policy environment. Investors appear more willing to bet on equities, especially as tech giants and AI-driven companies continue to outperform.
The S&P 500 rose about 0.1% to 0.17% , continuing its streak of record closing highs.
rose about , continuing its streak of record closing highs. The Nasdaq Composite edged up roughly 0.01% to 0.1% , also hitting fresh all‑time highs.
edged up roughly , also hitting fresh all‑time highs. The Dow Jones Industrial Average climbed between 0.16% and 0.2% , but still remained just below its all‑time high.
climbed between , but still remained just below its all‑time high. Intel shares dropped significantly, dragging on Dow performance despite broader market strength.
significantly, dragging on Dow performance despite broader market strength. Strong earnings from roughly 80% of S&P 500 companies helped fuel investor confidence.
from roughly 80% of S&P 500 companies helped fuel investor confidence. Tech and AI stocks—including big names like Alphabet and Nvidia—led the gains.
Both the S&P 500 and Nasdaq Composite have been grinding out small but consistent gains throughout the week, and Friday followed suit. The S&P 500 added around 0.1% to 0.17%, while the Nasdaq Composite hovered just above the flatline, up by about 0.01% to 0.1%. These small advances may not seem headline-worthy, but they have kept both indexes in record-breaking mode, notching up the longest streak of all-time closing highs since December. This quiet but persistent climb reflects underlying confidence in the U.S. economy, earnings season resilience, and a hopeful outlook on interest rate adjustments. The Dow Jones Industrial Average, which slipped by 0.7% on Thursday, rebounded slightly on Friday morning, rising about 0.16% to 0.2%. Although still just shy of its all-time high, the Dow's recent movements suggest stability amid corporate turbulence.
A key reason the Dow is lagging slightly behind its peers is the sharp drop in Intel shares, which tumbled over 6% to 8% after the chipmaker reported a surprise quarterly loss and announced planned job cuts. Intel's performance weighed on the Dow but had less impact on the broader market indexes like the S&P 500.
A major catalyst behind the current stock market rally is the performance of technology and AI-driven stocks. Companies like Alphabet (Google) and Nvidia have played a crucial role in propping up the S&P 500 and Nasdaq Composite.
The widespread enthusiasm around artificial intelligence continues to fuel investor appetite, especially with businesses across sectors ramping up their investments in AI tools, chips, and platforms. Nvidia's continued dominance in the GPU space, along with Google's strong cloud and AI integration, signals a tech-fueled growth cycle that's far from over. Another key driver of the bullish market trend is a better-than-expected earnings season. So far, approximately 80% of companies listed on the S&P 500 have beaten analyst expectations for second-quarter earnings. Positive surprises from consumer goods makers like Deckers Outdoor and healthcare players such as Edwards Lifesciences have reassured investors that inflation pressures are not eroding corporate profitability as feared. Earnings reports have also shown that many companies are managing to maintain margins, cut costs, and adapt to new consumer behavior trends in a high-interest-rate environment. As broader markets showed strength, one stock that clearly stole the spotlight was GE Vernova (GEV)—today's top-performing stock across the S&P 500. GE Vernova delivered an impressive earnings report, posting $1.73 per share , a dramatic rise from just $0.08 last year.
, a dramatic rise from just last year. The company's $9.1 billion in revenue beat expectations and highlighted strong growth across its energy and grid technology divisions.
beat expectations and highlighted strong growth across its energy and grid technology divisions. GE Vernova secured 9 gigawatts of new project contracts this quarter, cementing its position as a rising energy infrastructure leader.
this quarter, cementing its position as a rising energy infrastructure leader. Management raised the full-year revenue forecast to $36–$37 billion and increased the outlook for free cash flow , giving investors even more reason to stay bullish.
and increased the outlook for , giving investors even more reason to stay bullish. With shares now up over 90% year-to-date, GE Vernova is rapidly becoming one of Wall Street's favorite plays in the AI-powered energy transformation.
One of the most watched developments in recent weeks has been the Federal Reserve's evolving stance on interest rates. Speculation is mounting that the Fed could begin cutting rates as early as September, especially as inflation continues to cool and economic growth remains stable. Fed officials have been sending mixed but increasingly dovish signals, suggesting they are open to adjusting policy if inflation shows further signs of slowing. President Donald Trump's recent comments, urging the Fed to "do what's necessary" to maintain economic momentum, have also added pressure on central bankers. Lower interest rates would not only support consumer and business borrowing but also make equities more attractive relative to bonds, further supporting the ongoing stock market rally. Markets also found support from positive trade developments, particularly with key trading partners like Japan, the Philippines, Indonesia, and the European Union. As the August 1 deadline for new trade agreements approaches, expectations are high that the U.S. will finalize deals that benefit manufacturing, tech, and agricultural sectors. Investors are optimistic that these agreements could ease global supply chain pressures, reduce tariffs, and enhance export opportunities for U.S. firms. This sense of forward-looking trade optimism is helping keep markets steady even amid short-term uncertainties. With Friday's modest but solid gains, all three major U.S. indexes are heading toward their fourth positive week out of the past five. This trend reflects sustained market momentum, especially as new money continues to flow into equity markets from both retail and institutional investors.
The S&P 500's climb, in particular, has impressed analysts, with many noting how it has managed to break records without relying on large, volatile daily swings. Instead, it's been a gradual, fundamentally supported rally—something market bulls see as a sign of long-term strength rather than a short-term bubble. Here's a quick look at the current performance of the major U.S. stock indexes as of Friday, July 25: Index Movement Trend Status S&P 500 +0.1% to +0.17% Multiple daily record closes New all-time high Nasdaq +0.01% to +0.1% Flat to modest gains, still record New all-time high Dow Jones +0.16% to +0.2% Stabilizing after Intel-led drop Near record, not yet breached As we move into the final week of July, investors are watching several key developments: More earnings reports from tech and consumer giants like Apple , Amazon , and Procter & Gamble
from tech and consumer giants like , , and Further clarity on the Federal Reserve's interest rate path
Finalization of international trade agreements
Ongoing developments in AI, chip manufacturing, and data security
July jobs data and new inflation reports that may guide rate cut decisions Markets may remain relatively calm in the short term, but any surprise—positive or negative—on these fronts could drive volatility. For now, though, the prevailing trend points to cautious optimism, backed by solid fundamentals and investor confidence.The U.S. stock market is navigating a sweet spot of strong earnings, hopeful Fed signals, and tech-driven growth. As long as inflation remains in check and policy supports expansion, the path of least resistance may continue to be upward. Q1: Why is the US stock market hitting new records now? Strong earnings, AI stock growth, and Fed rate cut hopes are pushing it higher.
Q2: What's keeping the Dow Jones from reaching a record? Intel's weak earnings and job cuts slowed down the Dow's momentum.