Apple’s investment fuels tech rally driving US market upward
United States (US) stock markets surged on Friday night, with technology stocks extending their gains following Apple’s announcement of a $600 billion investment plan. For the week, the US Tech 100 (Nasdaq 100) rose 3.73%, the US 500 (S&P 500) gained 2.43%, and the Wall Street (Dow Jones) added 587 points (1.35%).
Last week’s rally was further supported by:
- Strong corporate earnings
- Reports of a potential Russia-Ukraine ceasefire
- Stephen Miran’s appointment to the Federal Reserve (Fed) Board. Miran’s appointment comes amid reports that Fed Governor Christopher Waller is President Trump’s top candidate to replace current Fed Chair Jerome Powell.
Upcoming Fed speeches and expectations
Waller has maintained a dovish stance throughout 2025, which aligns with Trump’s preference for lower interest rates. While it remains uncertain whether Miran’s appointment will take effect before the September Federal Open Market Committee (FOMC) meeting, last week’s shift in Fed tone was evident, as several officials expressed concerns about growth following the July employment report.
This will also be in mind when Fed Reserve voter Michelle Bowman speaks this week for the first time since her dissent explanation published on 1 August, which outlined her reasons for voting for a rate cut at last month’s FOMC meeting. Bowman argued that inflation is moving closer to the target, excluding temporary tariff effects.
This week’s focus
Looking ahead, the market largely is expecting the US-China trade truce set to expire on Tuesday to be extended for another 90 days. As earnings season winds down, Tuesday night’s consumer price index (CPI) report, highlighted below, will be the key focus this week.
US CPI preview
Date: Tuesday, 12 August at 1.30pm BST
For June, the annual rate of headline inflation in the US rose to 2.7% from 2.4%, marking its highest level since February. The annual core inflation rate increased slightly to 2.9% from 2.8%, just below market expectations of 3%. For July, the expectation is for the annual headline inflation rate to climb to 2.8%, with the core measure edging higher to 3%, as the inflationary impact of tariffs can again be observed.
A hotter-than-expected CPI could raise fears of stagflation and weigh on risk sentiment, potentially hurting US stock markets. Conversely, if inflation comes in below expectations, it could boost hopes that the Fed will cut rates sooner and more aggressively, providing a boost for stocks.
Despite an expected rise in inflation, the US interest rate market is almost fully priced for a 25 basis point (bp) cut at the September FOMC meeting after July’s soft US non-farm payrolls (NFP) jobs report. There is a total of 57 bp of Fed rate cuts priced between now and the end of the year.