S&P 500 and Nasdaq futures rise after record highs as cooling inflation boosts Fed rate cut hopes; small-cap rally, Cava and CoreWeave earnings in focus.

S&P 500 and Nasdaq Futures Advance as Markets Build on Record-Setting Session

U.S. stock futures traded higher early Wednesday, continuing the momentum from a record-breaking Tuesday session fueled by signs of easing inflation and growing expectations of a Federal Reserve interest rate cut in September.

• S&P 500 futures rose 0.2%
• Nasdaq-100 futures also gained 0.2%
• Dow Jones Industrial Average futures climbed 107 points, or 0.2%

Wall Street Recap: A Day of Records

On Tuesday, the S&P 500 surged 1.1% to close at 6,445.76, setting a fresh all-time high. The Nasdaq Composite rallied 1.4% to finish at 21,681.90, while the Dow Jones Industrial Average advanced 483 points (1.1%) to end at 44,458.61.

Small-Cap Surge

The Russell 2000 Index jumped nearly 3%, marking one of its strongest sessions in months. Small-cap stocks, often sensitive to shifts in interest rates, benefitted from market bets on lower short-term borrowing costs.

Inflation Data Sparks Rate-Cut Optimism

The latest consumer inflation report came in softer than expected, easing fears that tariffs or supply-chain disruptions were reigniting price pressures.

According to the CME FedWatch Tool, traders are now assigning a 94% probability that the Fed will cut rates at its September policy meeting.

Upcoming Data and Events to Watch

• Thursday, Aug. 14: U.S. Producer Price Index (PPI) — a key measure of wholesale inflation.
• Aug. 21-23: Federal Reserve Jackson Hole Symposium — expected to offer clues on the central bank’s policy path.

Analysts Urge Caution Despite Rally

While the strong performance in equities is encouraging, some analysts are questioning whether the rally is sustainable.

Warren Pies, co-founder of 3Fourteen Research, told CNBC:

“We’ve had some seasonal buying in the beginning of August, and I think people are starting to jump the gun and misinterpret that as this summer melt-up. I have concerns about the labor market and growth story, which the market seems to be glossing over.”

Stock Spotlight: Earnings Movers

Cava Group (CAVA)

Shares of Mediterranean fast-casual chain Cava plummeted 22% after the company posted weaker-than-expected Q2 revenue growth and cut its full-year same-store sales outlook.

CoreWeave

Artificial intelligence infrastructure firm CoreWeave fell 9% after delivering a mixed quarterly report — revenue growth was robust, but profitability and guidance underwhelmed investors.

Technical Market View

• S&P 500 support: 6,400
• S&P 500 resistance: 6,500
• Nasdaq Composite support: 21,500
• Nasdaq Composite resistance: 21,850

A break above resistance could extend the rally, while a dip below support might trigger profit-taking.

Sector Performance Snapshot

• Technology: Strongest gainer, driven by AI-related optimism and semiconductor stocks.
• Financials: Benefitted from easing rate fears.
• Consumer Discretionary: Boosted by retail optimism ahead of back-to-school season.
• Energy: Slightly down on oil price volatility.

Investor Takeaways

• Cooling inflation has reignited hopes for a Fed rate cut.
• Small-cap rally signals risk appetite but may not be sustainable.
• Earnings remain a key driver of short-term stock movements.
• Upcoming PPI and Jackson Hole speeches could reshape market sentiment.

FAQs

Q: Why are small-cap stocks rallying?
A: Investors expect lower borrowing costs to boost growth prospects for smaller companies.

Q: Is a Fed rate cut in September guaranteed?
A: No, but futures markets see a 94% chance based on current inflation trends.

Q: What’s next for Cava and CoreWeave shares?
A: Both face near-term volatility as investors digest their earnings guidance.