Dow rallies 400 points for a second day, S&P 500 closes at another record high

Stocks rose Wednesday, adding to their recent momentum as expectations for lower U.S. Federal Reserve rates continue driving the major indexes to all-time highs.

The Dow Jones Industrial Average gained 463.66 points, or 1.04%, at 44,922.27. The S&P 500 added 0.32% to finish at 6,466.58, while the Nasdaq Composite settled up 0.14% at 21,713.14. Both indexes closed at record highs for the second straight day.

AMD popped 5.4% to lead gains in tech. Apple also advanced 1.6%. Shares of Paramount Skydance soared 36.7%.

Those moves followed a record-setting session Tuesday sparked by a tamer-than-expected inflation report that gave investors hope of a Fed rate cut in September. Traders are pricing in a near 100% chance of a rate cut at the Fed’s September meeting, per trading data from the CME’s FedWatch Tool. 

Ross Mayfield, investment strategist at Baird, also pointed to a strong second-quarter earnings season so far as another market catalyst. While the pace of earnings reports has lulled these last few days, it ramps back up next week with a slew of big retail names on the docket.