Introduction
On July 11, 2025, the Nasdaq Composite soared to a new all-time high, fueled by another powerful rally in artificial intelligence (AI) and semiconductor stocks. The index gained 1.6% to close at 17,350.21, surpassing its previous peak from early June and capping a week of bullish momentum driven by improving economic data, dovish Federal Reserve commentary, and surging demand for AI-related technologies.
The S&P 500 rose 1.1% to finish at 5,419.88, while the Dow Jones Industrial Average added 0.8% to reach 40,085.21, its highest level since January 2022. Investor sentiment was further buoyed by the June Consumer Price Index (CPI) report, which showed continued disinflation, reinforcing expectations for a Fed rate cut as early as September.
This article dissects the key catalysts behind the Nasdaq’s record-setting session, focusing on AI stock performance, macroeconomic developments, and forward-looking market expectations.
June CPI: Disinflation Trend Holds
The Bureau of Labor Statistics reported that the CPI rose just 0.1% in June month-over-month, bringing the year-over-year rate down to 2.9% from 3.2% in May. Core CPI, which excludes food and energy, rose 0.2% on the month and 3.5% year-over-year, also below consensus expectations.
Key takeaways from the report:
- Shelter inflation continued to ease, rising 0.3% MoM
- Goods prices declined for the second consecutive month
- Medical services inflation moderated further
The data reinforced the notion that inflation is trending toward the Fed’s 2% target, increasing the probability of a rate cut at the September meeting. Fed funds futures now imply an 81% chance of a 25-basis-point cut.
AI Sector Powers Nasdaq Higher
The artificial intelligence boom remains the dominant theme in equity markets. AI leaders extended their gains as investor enthusiasm over enterprise adoption, productivity enhancements, and infrastructure upgrades continued to build:
- Nvidia (NVDA): +4.8%, reaching a new record high of $1,127
- Advanced Micro Devices (AMD): +3.9%, on news of expanded data center contracts
- Palantir (PLTR): +5.3%, after announcing new AI government partnerships
- Super Micro Computer (SMCI): +6.5%, driven by strong forward guidance
The Global X Robotics & AI ETF (BOTZ) rose 3.2%, while the iShares Semiconductor ETF (SOXX) gained 2.9%.
Broader Tech and Growth Participation
The AI rally lifted broader technology and growth names:
- Apple (AAPL): +1.7%, ahead of earnings next week
- Microsoft (MSFT): +2.0%, as Azure’s AI integrations continue to expand
- Alphabet (GOOGL): +1.9%, boosted by gains in Google Cloud AI revenue projections
Software-as-a-service (SaaS) names, cloud infrastructure firms, and cybersecurity stocks also saw inflows as investors rotated into high-beta growth names.
Sector Performance and Market Breadth
All 11 S&P 500 sectors closed higher, led by:
- Technology: +2.3%
- Communication Services: +1.5%
- Consumer Discretionary: +1.4%
Even traditionally defensive sectors posted gains:
- Utilities: +0.5%
- Health Care: +0.6%
Market breadth was strong, with advancing stocks outpacing decliners by more than 3-to-1 on the NYSE. The VIX volatility index fell to 11.8, the lowest since January 2020, signaling low perceived risk in the near term.
Bond Market and Dollar Reaction
U.S. Treasury yields declined following the CPI data:
- 10-year yield: Down 6 bps to 4.15%
- 2-year yield: Down 8 bps to 4.38%
The move reflected increased confidence in a dovish Fed path. Meanwhile, the U.S. Dollar Index (DXY) fell 0.5% to 104.12, as rate differentials narrowed.
Commodities and Crypto: Modest Gains
Gold rose 0.7% to $2,537 per ounce, continuing its steady advance amid a weaker dollar and disinflation tailwinds.
Oil prices were steady, with Brent closing at $72.70 per barrel and WTI at $69.10.
Bitcoin rose 1.5% to $78,500, while Ethereum added 1.3% to $4,240, driven by ETF inflows and macro liquidity support.
Crypto-adjacent equities also advanced:
- Coinbase (COIN): +5.1%
- Riot Platforms (RIOT): +4.7%
Earnings Season Setup
With earnings season set to kick off next week, investors are closely watching for guidance from tech giants. Expectations are high, especially for companies with direct exposure to AI infrastructure and services.
Analysts forecast:
- Nvidia Q2 revenue growth: +42% YoY
- Microsoft AI-related cloud revenue: +33% YoY
- Alphabet AI R&D spending: up 25% YoY
Any earnings disappointments could spark volatility, but sentiment remains robust given the perceived secular tailwinds from AI proliferation.
Conclusion
The Nasdaq’s new record on July 11 reflects the confluence of disinflationary data, easing Fed expectations, and sustained enthusiasm for AI and technology megatrends. Investors are growing more confident that the Fed will begin cutting rates in the fall, providing a tailwind for high-duration, growth-oriented assets.
While valuations in tech and AI remain elevated, the narrative of productivity gains, efficiency improvements, and long-term disruption continues to drive capital into the sector.
Looking ahead, markets will focus on:
- Q2 earnings season for confirmation of AI revenue traction
- Fed Chair Powell’s testimony recap and regional Fed speeches
- Next week’s PPI and retail sales data
With momentum and fundamentals aligned, the rally in risk assets appears set to continue—though elevated expectations raise the stakes for upcoming corporate and macro signals.
