US stocks climbed on Wednesday amid increasing expectations that the Federal Reserve will cut interest rates at its next meeting, following the latest inflation data.

The Dow Jones Industrial Average (^DJI) led the major gauges, rising nearly 0.8%. The benchmark S&P 500 (^GSPC) and the tech-heavy Nasdaq Composite (^IXIC) pared earlier gains. The S&P 500 rose 0.1%, while the Nasdaq hovered around the flat line.

The gains followed a big upswing in stocks on Tuesday after the release of the July Consumer Price Index (CPI) report, with the S&P 500 and Nasdaq both touching new records. Though the data showed inflation had ticked up, it increased less than expected.

Treasury Secretary Scott Bessent also on Wednesday called on the Fed to lower rates by 150 to 175 basis points.

"I think we could go into a series of rate cuts here, starting with a 50 basis point rate cut in September," he told Bloomberg.

The results boosted bets the Fed would cut interest rates at its September policy meeting, especially in light of recent warning signs the labor market is weakening. On Wednesday morning, traders had priced in a nearly 100% chance of a September cut, according to the CME Group.

Later this week, investors will get two more snapshots on the state of the economy with the release of the Producer Price Index on Thursday and retail sales data on Friday.

In corporate news, Circle (CRCL) fell on Wednesday after the company announced it would sell 10 million shares on the heels of its first earnings report since its explosive public debut. Cava (CAVA) shares also dove after the company issued its first annual sales growth target cut. CoreWeave (CRWV) stock plummeted as the company's operating income guidance fell below expectations and as its cost of debt mounts, despite beating revenue estimates on strong demand for AI.

Looking ahead, Cisco (CSCO) is Wednesday's earnings headliner after the closing bell.

Yahoo Finance's Ines Ferré reports:

Ethereum (ETH-USD) prices rose to near record levels on Wednesday as Wall Street grows increasingly bullish on the crypto play.

The world's second largest crypto currency by market cap jumped as much as 6%, to hover above $4,680 per token, just shy of its 2021 record level.

\\"We have stated multiple times we believe Ethereum is the biggest macro trade over the next 10-15 years,\\" Fundstrat head of research Tom Lee wrote in a note on Wednesday.

Lee noted the majority of Wall Street crypto projects and stablecoins, or digital tokens backed by assets like the US dollar, are being built on the ethereum infrastructure.

Read more here.

The Trump administration is broadening its search for the next Federal Reserve chair, with reports suggesting as many as 11 candidates may be in the running to replace Jerome Powell when his term expires in May, Yahoo Finance's Jennifer Schonberger reports.

Schonberger writes:

Treasury Secretary Scott Bessent, who is leading the search and interview process for the next Fed chair, said the administration is casting a \\"very wide net\\" for candidates.

\\"The president has a very open mind,\\" Bessent told the Fox Business Network on Tuesday.

The broadening search marks an evolution since last week, when Trump said he had narrowed down his list of candidates to three or four people.

Read the full story here.

CoreWeave (CRWV) stock plummeted 18% Wednesday after the AI data center company reported a disappointing quarterly outlook for its operating income.

The company said the previous day that it expects its third quarter operating income to fall between $160 million and $190 million, below the $192 million expected by Wall Street analysts tracked by Bloomberg. At the same time, the company expects interest expense of $350 million to $390 million during that period.

DA Davidson analyst Gil Luria told Yahoo Finance in an email Wednesday that \\"deteriorating operating income guidance highlights the main issue for CoreWeave - their interest expense is higher than their operating income which means they aren't generating enough profit to pay their debt holders.\\"

CoreWeave is one of the largest holders of Nvidia's (NVDA) AI chips and rents its data center capacity to Big Tech firms such as Microsoft (MSFT), Meta (META), and Google (GOOG) as they scramble to power their AI ambitions. CoreWeave stock’s performance is closely watched as a metric of AI demand.

Grocery stocks are under pressure, including Instacart (CART), Kroger (KR), Albertsons (ACI), and Sprouts Farmers Market (SFM), after Amazon (AMZN) announced same-day delivery for groceries.

On Wednesday, the e-commerce giant said it would start offering same-day perishable grocery delivery in over 1,000 cities. Amazon plans to reach over 2,300 areas across the US by the end of 2025.

The service is available for Prime members for free, only on orders over $25. It will cost $12.99 without the membership.

In comparison, Instacart has additional service fees but a lower threshold of $10 or more per delivery order.

Amazon stock is roughly flat, compared to the nearly 11% decline in Instacart shares and roughly 4% decline for Kroger, Albertsons, and Sprouts.

Cryptocurrency exchange operator Bullish (BLSH) is set to go public on Wednesday at a valuation north of $5 billion as the IPO market looks set to continue a strong summer.

Yahoo Finance's Jake Conley reports:

The company, which operates a crypto exchange and owns the prominent trade publication CoinDesk, said Tuesday that it had priced its IPO at $37 per share, above the $32 to $33 range the company had expected in its second shot at making a public market debut.

Bullish first attempted to go public via a SPAC merger in 2021 that would have valued the company at $9 billion, but the deal fell through after regulatory scrutiny and Bullish withdrew its registration.

This is the company's second range increase for its latest offering, with the previous $32 to $33 per share estimate raised from an earlier range of $28 to $31 per share. At 30 million shares offered, the IPO price will see Bullish raise $1.1 billion and value the fintech company at $5.41 billion.

Read the full story here.

US stocks moved higher on Wednesday after the open as expectations for Fed interest rate cuts rose.

The tech-heavy Nasdaq Composite (^IXIC) and the Dow Jones Industrial Average (^DJI) rose more than 0.5%, while the benchmark S&P 500 (^GSPC) gained 0.4%.

Within the S&P 500, the Consumer Discretionary Sector (XLY) was up 0.7%, while the Technology Sector (XLK) climbed more than 0.6%.

US Treasury yields fell on Wednesday as traders increased bets that the Federal Reserve would cut interest rates at its September meeting following a rise in core inflation.

At the same time, Treasury Secretary Scott Bessent urged the Fed to cut interest rates by 150 basis points in an interview with Bloomberg on Wednesday, maintaining political pressure on the central bank.

The 10-year Treasury yield (^TNX) fell 4 basis points to 4.25%, and the 30-year yield (^TYX) dropped to 4.84%.

As my colleague Jenny McCall notes below, strong domestic liquidity in China and positive sentiment from the US trade truce have boosted Chinese stocks in recent months.

On Wednesday, that rally continued in top Chinese stocks, as recent inflation data boosted hopes for US interest rate cuts and tech companies gained greater clarity around the sale of Nvidia and AMD chips in China.

Tencent (0700.HK) gained 4.7% after the WeChat parent company reported revenue growth of 15%, above estimates. The company is also accelerating AI research to keep up with the competition, which includes Alibaba (BABA), ByteDance, and US companies OpenAI and Anthropic.

US-listed shares of e-commerce company Alibaba rose 3.6%, while JD.com (JD) added 2%. Baidu (BIDU) climbed 2.5%, and PDD Holdings (PDD) rose 1.9%.

The VIX (^VIX) volatility index, a key fear gauge in markets, slipped to 14.49 on Wednesday morning, hitting its lowest level since late December 2024.

Despite geopolitical tensions and lingering tariff uncertainty, there are a few reasons why markets are pricing in fewer swings.

For one, investors are holding a lot of cash and buying assets at lower prices during sell-offs, according to Bloomberg. Second, the global economy appears to be holding up better than investors expected after President Trump unleashed \\"Liberation Day\\" tariffs in April. At that time, the VIX spiked to 52.

Bloomberg reports:

Indeed, the US President has walked back from his most extreme tariffs threats, stoking investor confidence that he will ultimately always relent after aggressive posturing. That strategy — which analysts and strategists call “TACO” for “Trump Always Chickens Out” — mean investors have stepped in for fear of missing out on a rally.

Investors “realize that they’re watching the market go up,” said Guy Miller, chief market strategist and head of macroeconomics at Zurich. “There are still a lot of risks out there, but they feel they have to participate in this.”

Read more here.

Economic data: MBA Mortgage Applications (week ending Aug. 8)

Earnings: Brinker International (EAT), Cisco (CSCO), Red Robin (RRGB)

Here are some of the biggest stories you may have missed overnight and early this morning:

Earnings live: Cava stock tumbles and CoreWeave slides

Crypto is having a breakout summer — and bitcoin isn't the reason

US leads markets higher as world adapts to tariff policy

Dutch Bros eyes expansion as Starbucks battle heats up

Investors playing more defense even as stocks climb to new highs

US 30-year mortgage rate falls, refi applications surge

Market gauges of volatility are fading despite high uncertainty

China's $11T stock market stages steady resurgence

The crypto world has had room to run this year amid a series of legislative wins and new financial initiatives. But notably, the big news items don't really involve bitcoin (BTC-USD), Yahoo Finance's Hamza Shaban notes in today's Morning Brief.

Hamza writes:

Circle (CRCL), the issuer of the second-largest stablecoin, posted better-than-expected quarterly revenue for the first time since going public.

Bitmine (BMNR), an Ethereum treasury company, announced plans to sell up to another $20 billion worth of stock to boost its holdings of the cryptocurrency.

And an array of popular altcoins is gaining ground.

The moves collectively reflect the warm embrace of the Trump administration, which has championed the crypto industry and shifted the regulatory environment long seen as an obstacle to the adoption and growth of digital currency.

But the success of Wall Street's crypto hedges also underscores rising institutional interest. Despite the risks, and perhaps because of them, more investors are growing comfortable with crypto exposure. And companies are chasing the returns of amassing tokens in a feedback loop that, however fleeting and precarious, seems to be paying off.

The Nikkei 225, the primary index for the Tokyo Stock Exchange, is trading at all-time highs amid optimism that confusion over the recent US-Japan trade agreement is being addressed in addition to the renewed strength in Big Tech.

Domestically, Japan's key auto industry is cautiously optimistic that the the positive will outweigh any drag coming from tariffs.

\\"The Nikkei was not able to hit a record until today because chip-related shares and auto shares dragged on the index,\\" Takamasa Ikeda, senior portfolio manager at GCI Asset Management, told Reuters.

Chinese stocks have risen in recent months, helped by strong domestic liquidity and despite a lack of major catalysts.

Bloomberg News reports:

Mainland households, flushed with record-high savings, are turning to equities for better returns as interest rates continue to drift lower. The amount of margin loans taken out to buy stocks climbed to the highest level since 2015 this week. The momentum is also seen in the monthly average turnover on onshore exchanges, which is on track for a third month of advances.

That’s pushed up the benchmark CSI 300 Index (000300.SS) 16% from its April low, following months of range-bound trading. While Beijing hasn’t announced any major stimulus or finalized a trade deal with the US, markets have reacted positively to recent moves to curb excessive price wars and overcapacity in some sectors. These steps are seen by investors as a way to ease deflation and boost corporate earnings, which could provide further support to the market gains.

Read more here.

CoreWeave (CRWV) was teed up to let down investors last night.

And it did on several fronts.

First, the company's net loss was much higher than consensus.

Second, capital expenditures were a whopping $1 billion higher sequentially. And third, capex may climb another $500 million in the current quarter.

While I appreciate the company's revenue backlog of $30.1 billion doubled year over year, the company's mixed results and high debt load are real causes for concern. Hence, the sharp pre-market pullback.

Here are two important call outs this morning from DA Davidson analyst Gil Luria:

\\"With operating income of $200 million and interest expense of $(267 million) it appears that CoreWeave does not currently generate enough profit to pay all its debt holders, certainly not equity holders. Guidance of $(350)-(390) million of interest expense on only $160-190 million of operating income indicates that may be getting worse.\\"

\\"CoreWeave will likely need to add $10 billion more debt during the balance of the year to support their data center expansion plans. Management acknowledges that they will have to bring more debt onto the balance sheet in order to scale this business further, and we believe they will have to perform significant capital raises in the near-term just to meet their guidance and capacity commitments.\\"

Cava (CAVA) is getting run over premarket to the tune of 23%.

Bottom line on this one: When you are valued as a high-growth stock and you don't deliver high growth, your stock will take a beating.

Same restaurant sales only rose 2.1%.

The company slashed its full-year same-restaurant sales guidance.

The earnings call wasn't exactly alarming — the company appears to still be structurally sound.

But a slower economy and increased competition is weighing on the brand's results. We heard the same exact tone at Chipotle (CMG) and Starbucks (SBUX) this earnings season.

The positive here: Cava is testing salmon for its menu. Who doesn't like salmon in a $15+ salad bowl?!