U.S. stock markets surged on Monday (August 5), with investors cheering positive economic data and signs of steady interest rates from the Federal Reserve. The S&P 500 marked yet another all-time closing high, reflecting renewed confidence in the resilience of the world’s largest economy.
At the close, the Dow Jones Industrial Average jumped 408.63 points, or 0.94%, to end at 43,997.21. The S&P 500 gained 0.72% to close at 6,282.11, posting its 15th record close in 2025. Meanwhile, the Nasdaq Composite edged up 0.28% to finish at 20,708.32.
The rally followed a report from the Institute for Supply Management (ISM), which showed a modest uptick in U.S. services activity in July, suggesting continued economic expansion. Coupled with easing inflation data, the market increasingly believes that the Federal Reserve may maintain its current interest rate range for a longer period.
Mark Cabana, Head of U.S. Rates Strategy at Bank of America, commented, “Markets are leaning toward the Fed holding off on a rate cut in September, but expectations for easing in late 2025 remain firmly in place.”
Technology stocks continued to outperform, driven by long-term optimism surrounding artificial intelligence (AI) and digital transformation. Microsoft and Nvidia each rose over 1%, while Meta Platforms gained nearly 2% following news of further investment in virtual reality infrastructure.
Financials also rebounded strongly after a recent pullback. Stocks of major banks like JPMorgan Chase, Goldman Sachs, and Morgan Stanley climbed between 1.5% and 2.3%, buoyed by stable U.S. Treasury yields and a positive outlook for Q3 earnings.
Investor sentiment remains upbeat as earnings season ramps up, with many major S&P 500 companies expected to report their quarterly results this week. Strong corporate earnings are seen as a key driver behind recent equity gains.
According to FactSet data, over 80% of S&P 500 companies that have reported so far have beaten Wall Street’s profit expectations — underscoring the underlying strength of the U.S. economy despite global headwinds.
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