Stocks closed higher Wednesday as rising hopes for a September rate cut continued to lift sentiment, though the latest batch of earnings reports had two of the three main indexes finishing well off their season highs.
Another red-hot initial public offering (IPO) also kept Wall Street engaged today, with Peter Thiel-backed Bullish (BLSH) nearly doubling in its market debut.
According to CME FedWatch, futures traders are pricing in a 96% chance the Federal Reserve will lower the federal funds rate by a quarter-percentage point at its next meeting in September – up from 57% one month ago.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
And following Treasury Secretary Scott Bessent's calls on Bloomberg TV for the Fed to lower by half a percentage point, the odds of a more aggressive rate cut have risen to 4.1% from zero just one day ago.
At the close, the tech-heavy Nasdaq Composite was up 0.1% at 21,713 and the broader S&P 500 was 0.3% higher at 6,466 – new record highs.
The blue chip Dow Jones Industrial Average gained 1.0% to 44,922 on strength in UnitedHealth Group (UNH, +3.9%) and Nike (NKE, +3.1%).
Bullish becomes the latest hot crypto stock
The IPO market remains hot as evidenced by today's market debut from Bullish, the Peter Thiel-backed crypto platform that owns CoinDesk.
After pricing the Bullish IPO at $37 per share Tuesday night – above the previous range of $32 to $33 per share – shares opened today at $90. BLSH stock hit an intraday high of $118, before settling at $68.
CoreWeave crashes on margin concerns
In other IPO news, artificial intelligence (AI) cloud company CoreWeave (CRWV) reported its quarterly results – the second time it has done so since it went public in March.
CoreWeave disclosed higher-than-expected Q2 revenue of $1.21 billion – more than triple the year-ago period – thanks to an expanded partnership with OpenAI. It also forecast third-quarter revenue that's above analysts' estimates and raised its full-year forecast.
Still, the tech stock plunged 20.8% today on concerns over its aggressive investments.
"Management emphasized that 'powered shells' and 'access to power' remain the bottleneck to AI growth and disclosed a target of exiting calendar year 2025 with more than 900 megawatts of active power," says Needham analyst Matt Calitri (Hold). This is up roughly 90% from Q2, he adds.
Calitri says that while the significant increase in capacity and associated capital expenditures "is a strong leading indicator for revenue generation," it also "serves as a margin headwind in the interim while introducing execution and supplier risk."
Cava Group slides after earnings
Elsewhere on the earnings calendar, Cava Group (CAVA) dropped 16.6% after the Mediterranean fast-casual restaurant chain missed on the top line for its second quarter.
The company also reported lower-than-anticipated same-store sales of 2.1% and cut its full-year same-store sales forecast. In addition, CAVA anticipates higher pre-opening costs for new restaurants in 2025.
"In what has proved to be a tough quarter in fast-casual, CAVA's second-quarter comps missed expectations on slower trends in June," says William Blair analyst Sharon Zackfia. "Still, two-year comp and traffic trends both accelerated sequentially against a much tougher comparison."
Zackfia maintained an Outperform (Buy) rating on the consumer discretionary stock "given robust new unit productivity and good visibility on annual EBITDA [earnings before interest, taxes, depreciation and amortization] growth of 25%-plus through 2027."
Related content
- How to Invest for a Fall Interest Rate Cut by the Fed
- Trump-Era Regulations Will Broaden Access to Crypto
- Rising Prices: Which Goods and Services Are Driving Inflation?
-
Credit Cards That Actually Reward Your LoyaltyIf you have bank or investment accounts with your credit card issuer, you may qualify for extra cash back, waived fees and other benefits.
-
The 10 Most Valuable Vacation Destinations for Retirees in 2026Whether traveling within the U.S. or internationally, retirees can find a perfect blend of relaxation and excitement in these destinations, all while staying within budget.
-
Will Taxes Shred Your 401(k) or IRA During Your Retirement? It's Very LikelyConventional wisdom dictates that you save in a 401(k) now and pay taxes later, but turning that rule on its head could leave you far better off. A financial planner explains why.
-
More Retirees Are Renting: Should You? A Financial Adviser Weighs InIn some ways, renting is cheaper, more flexible and easier, but unless you understand the implications for your taxes and health costs, it might not be for you.
-
Dow Dives 878 Points on Trump's China Warning: Stock Market TodayThe main indexes erased early gains after President Trump said China is becoming "hostile" and threatened to cancel a meeting with President Xi.
-
I'm a Real Estate Investing Pro: This 1031 Exchange Strategy Can Triple Your Cash FlowSavvy investors can use 1031 exchanges to unlock value by moving capital across markets in a play called geographic arbitrage. These tax implications can make or break the strategy.
-
I'm an Insurance Pro: Everyone Needs to Prepare for Earthquakes, Even if You Don't Live Near a Fault LineHere are my tips for what to do before, during and after an earthquake. The more prepared you are, the more you'll be able to keep your wits about you if it happens.
-
Stocks Retreat as Shutdown Continues: Stock Market TodayWhile the main indexes closed lower today, Delta and PepsiCo gained ground on encouraging earnings reports.
-
Where There's a Will, There's a Way Your Assets Will Be Distributed as You WishYour will is the backbone of a strong, adaptable estate plan that ensures what you leave behind goes to your selected beneficiaries. Without a will, state laws determine who gets your assets.
-
I'm a Financial Adviser: This Is What You're Really Losing if You Cut Back on Your 401(k) ContributionsMissing out on the benefits of the employer match and compounding growth could force you to work longer and lower your standard of living in retirement. Here are some alternative options.
