Fed rate cuts may overstimulate economy

The S&P 500 reached its 20th record closing high of the year, buoyed by strong corporate earnings and anticipation of Federal Reserve rate cuts. Nvidia's positive results contributed to a supportive second-quarter earnings season. Market futures indicate an 85% probability of a 25 basis point Fed rate cut in September, following upcoming PCE inflation data. This potential stimulus comes as the economy may not require additional support, with some analysts suggesting it could further boost growth through a market wealth effect.