Dow and S&P 500 close at record highs as investors bet on September rate cut

Stocks surged on Tuesday as investors bet that borrowing rates could come down in the fall. The Dow jumped by 743 points, reaching a new all-time high and posting its best daily percentage gain in nearly three years. The S&P 500 and Nasdaq Composite also saw gains, closing at record highs. The positive sentiment was driven by strong corporate earnings and better-than-expected consumer spending. Retail sales in the US were stronger than anticipated in June, boosting optimism that the Federal Reserve will begin cutting interest rates in September. Gold futures settled at a record high. Economists expect a rate cut in September and two quarter-point cuts in 2024.