TheDrop Market Analysis, 08/12/25

Markets surged as investors used July's CPI report as an indicator that a rate cut in September is inevitable.

Chair of the Federal Reserve Bank Jerome Powell.

The S&P 500 composite rose 1.11%, the Dow 30 composite rose 1.07%, the Nasdaq composite rose 1.37%, and the Russell 2000 composite rose 2.97%. The 10-year bond rate likewise surged 0.5% as bond traders saw potential for a rate cut as a boom for broadening availability of loans across the country.

Gold and silver traded flat while the US Dollar strengthened against many well-known global currencies such as the Euro and the Pound.

Bitcoin rose 0.81% and XRP surged 3.9% as crypto traders bought the dip. The FTSE and Nikkei ETFs surged alongside their American counterparts.

Markets rose ahead of strong CPI results which led to many anticipating a 25 basic point rate cut in September, facilitated by these strong numbers. Thus, markets rose.