Published by Global Banking & Finance Review®
Posted on August 28, 2025
4 min readLast updated: January 22, 2026
Add as preferred source on GoogleS&P 500 and Dow reach record highs despite Nvidia's share dip. Dollar weakens as traders anticipate US interest rate cuts.
By Caroline Valetkevitch
NEW YORK (Reuters) -The S&P 500 and Dow Jones Industrial Average registered record closing highs on Thursday, even as Nvidia shares slipped amid uncertainty over its China business, while the dollar weakened against the euro and yen as traders anticipated U.S. interest rate cuts soon.
Leading artificial intelligence chip designer Nvidia's shares ended 0.8% lower as questions around the Sino-U.S. trade war clouded a better-than-expected revenue forecast from the company, released after Wednesday's market close. Still, investors viewed Nvidia's report, including a 56% surge in quarterly revenue, as confirmation that demand related to AI technology remains strong.
Other AI heavyweights gained, with Alphabet up 2% and Broadcom up 2.8%. The Nasdaq climbed as well, while the S&P 500 posted a record high close for a second straight day.
While there is some confusion over what will happen with China, Nvidia "didn't say anything that pointed to a significant slowdown in anything, so that took away a major risk or overhang this morning," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.
Nvidia CEO Jensen Huang also dismissed concerns about an end to a spending boom on AI chips and said opportunities will expand over the next five years.
Another plus for stocks was economic data, Tuz said. The day's data showed the U.S. economy grew faster than initially thought in the second quarter, in part driven by business investment in intellectual property such as AI.
The Dow Jones Industrial Average rose 71.67 points, or 0.16%, to 45,636.90, the S&P 500 rose 20.46 points, or 0.32%, to 6,501.86 and the Nasdaq Composite rose 115.02 points, or 0.53%, to 21,705.16.
MSCI's gauge of stocks across the globe rose 3.30 points, or 0.35%, to 956.34. The pan-European STOXX 600 index fell 0.2%.
Concerns over France's fiscal path are likely to stay in focus for European markets following Prime Minister Francois Bayrou's gamble to win backing for his deeply unpopular debt-reduction plan via a confidence vote next month.
The euro was up 0.35% at $1.1678. Against the Japanese yen, the dollar weakened 0.28% to 146.97.
Investors are keen to find out more about prospects for interest rate cuts ahead of the Federal Reserve's September 16-17 policy meeting.
On Wednesday, New York Fed President John Williams said it is likely interest rates can fall at some point, but policymakers will need to see what upcoming data indicate about the economy to decide if it's appropriate to make a cut at the September meeting.
Traders currently are pricing in roughly 84% odds of a rate cut in September, according to CME's FedWatch tool. In total, they see 138 basis points of cuts by the end of 2026.
Also key this week will be a report on Friday on U.S. personal consumption expenditures - the Fed's preferred inflation measure.
Investors were still digesting news on Federal Reserve Governor Lisa Cook. Cook filed a lawsuit on Thursday claiming U.S. President Donald Trump has no power to remove her from office, setting up a legal battle that could reset long-established norms for the U.S. central bank's independence.
U.S. Treasury yields were mixed, with some investors taking profits from a recent rally in two-year notes.
The yield on the interest rate-sensitive two-year note was last up 1.6 basis points at 3.639% after falling to 3.611% on Wednesday, the lowest since May 1. The benchmark 10-year note fell 2.7 basis points to 4.211% and reached 4.203%, the lowest since August 5.
“The big driver is the Fed story. Bond markets love rate cuts,” said Padhraic Garvey, regional head of research, Americas, at ING.
Oil prices rose, and gold prices hit a five-week peak. Spot gold rose 0.6% to $3,416.14 per ounce, hitting its highest level since July 23.
Brent crude futures gained 57 cents, or 0.8%, to settle at $68.62 a barrel, while U.S. West Texas Intermediate crude futures rose 45 cents, or 0.7%, to settle at $64.60 a barrel.
(Reporting by Caroline Valetkevitch; additional reporting by Karen Brettell in New York and Jaspreet Kalra in MumbaiEditing by Shri Navaratnam, Sonali Paul, Frances Kerry, Sharon Singleton, Susan Fenton, Rod Nickel)
The S&P 500 rose 20.46 points to close at 6,501.86, while the Dow Jones Industrial Average increased by 71.67 points to reach 45,636.90.
Nvidia's shares ended 0.8% lower due to uncertainty surrounding its business in China amid the Sino-U.S. trade war.
The U.S. economy grew faster than initially thought in the second quarter, driven by business investment in intellectual property, which positively impacted stock performance.
Traders are currently pricing in roughly 84% odds of a rate cut in September, with expectations of a total of 138 basis points of cuts by the end of 2026.
MSCI's gauge of stocks across the globe rose, while the pan-European STOXX 600 index fell 0.2%, indicating mixed reactions in global markets.
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