US equities surged as the S&P 500 closed just 0.12% below its record high from August 7, buoyed by a combination of a strong rally in AI-related stocks and a softer-than-expected US CPI report, which reduced the urgency for further Federal Reserve rate hikes [1]. The S&P 500 gained 0.26%, while its equal-weighted equivalent rose 0.16% to a new high. The Nasdaq advanced 0.54% and the Russell 2000 climbed 0.61%, reflecting broad-based gains across US indices [1]. In contrast, the Mag-7 group of stocks declined by 1.05% [1].
Semiconductor stocks were a particular highlight, with the Philadelphia Semiconductor Index jumping 2.49%. The index is now up 75.1% year-to-date and 18.7% from its July 29 low, though it remains 15.3% below its June record [1]. Individual standouts included CoreWeave (+19.28%) and Super Micro (+19.02%), both of which soared following upbeat outlooks, while Nebius surged 34.14% after reporting a 454% year-on-year revenue increase to $582 million and stronger-than-expected margins [1].
Volatility continued to decline, with the VIX index falling 0.73 points to 14.55, its lowest level since January, suggesting a sense of calm and an August lull in the market [1]. In Asia, the positive momentum extended, with South Korea’s KOSPI up 4.46%—entering a technical bull market—and gains in the Nikkei 225 (+1.75%), CSI 300 (+0.49%), and Shanghai Composite (+0.42%). Only Australia’s S&P/ASX 200 retreated, down 0.39% [1].
European markets were softer, with the Stoxx 600 down 0.16%, ending a seven-day winning streak. The CAC 40 fell 0.46%, the DAX slipped 0.23%, and the FTSE 100 edged down 0.10%. Despite these declines, all four major European indices remain within 1% of their recent highs [1]. Tencent’s results after the Hong Kong close showed 11% sales growth, but its shares dropped 3.81% due to weaker-than-expected profits amid increased AI capital expenditures [1].
CONCLUSION
US equities are benefiting from a combination of AI-driven optimism and a benign inflation outlook, with major indices near record highs and volatility at its lowest since January. Semiconductor stocks and select tech names are leading the rally, while European markets remain close to their peaks despite a modest pullback. The market sentiment is broadly positive, supported by easing Fed hike concerns and strong tech sector performance.