Wall Street Surges as U.S. Stocks Rebound: S&P 500, Dow, and Nasdaq Bounce Back Amid Fed Rate Cut Hopes

Wall Street Surges as U.S. Stocks Rebound Amid Optimism Over Fed Rate Cuts and Strong Earnings

NEW YORK — August 4, 2025 — Wall Street staged a sharp rebound on Monday, clawing back much of Friday’s losses, as investor sentiment improved on the back of strong earnings and growing expectations that the Federal Reserve may cut interest rates at its upcoming September meeting.

The S&P 500 climbed 1.3% in afternoon trading, recouping more than two-thirds of the prior session’s losses. The Dow Jones Industrial Average surged by 493 points, or 1.1%, and the tech-heavy Nasdaq Composite jumped 1.8%, marking a positive turn after recent volatility triggered by economic uncertainty and trade policy concerns.

Driving much of the optimism was Idexx Laboratories, which saw its shares soar 26% following a stronger-than-expected profit report and an upward revision of its full-year earnings forecast. Tyson Foods also contributed to the gains, rising 3.2% after beating analysts’ expectations, with its Jimmy Dean and Hillshire Farms brands performing well.

However, not all the news was positive. Berkshire Hathaway shares dropped 3.5% after reporting a year-over-year decline in second-quarter profit, largely due to a reduction in the value of its stake in Kraft Heinz.

The broader market remains under pressure to deliver solid corporate earnings after a remarkable rally since April. While some analysts have raised concerns about overvaluation, recent earnings reports have offered reassurance.

Market volatility spiked last week following a dismal jobs report, which showed job growth had sharply decelerated and the unemployment rate had ticked up to 4.2%. In response, President Donald Trump reportedly fired the nation’s statistics chief and renewed criticism of the Federal Reserve, urging it to cut rates.

Bond markets responded accordingly. The yield on the 10-year Treasury fell slightly to 4.20%, down from 4.23%, while the two-year Treasury yield remained steady at 3.69%. These movements reflect increased expectations for a Fed rate cut next month.

According to David Lefkowitz of UBS Global Wealth Management, “If the Fed starts to cut rates at its September meeting, we believe this would be supportive for markets.”

Corporate earnings played a significant role in Monday’s market mood:

• Wayfair jumped 10.3% after reporting accelerating growth and better-than-expected profits.

• Tesla rose 2.1% following its decision to award CEO Elon Musk 96 million shares of restricted stock valued at $29 billion. The move could help calm investor concerns after a prior legal order to revoke his pay package.

• CommScope skyrocketed 89.5% after beating profit expectations and announcing the $10.5 billion sale of its connectivity and cable business to Amphenol, which also saw a 3.1% rise.

• On Semiconductor fell 12.9% despite meeting expectations, citing “signs of stabilization” in its customer base.

• Boeing remained mostly flat amid news that workers building fighter jets had gone on strike.

Global markets echoed the positive tone. South Korea’s Kospi rose 0.9%, France’s CAC 40 gained 1.1%, while Japan’s Nikkei 225 was the exception, falling 1.2%.

Looking ahead, Wall Street anticipates a calmer week with fewer earnings reports but notable updates from heavyweights like The Walt Disney Co., McDonald’s, and Caterpillar. Data on U.S. business activity is also expected to shape investor outlook.

While uncertainty remains, particularly surrounding the Fed’s next moves and trade policy developments, Monday’s rally suggests investor confidence remains resilient — at least for now.