U.S. Stocks at Record Highs Face Inflation Test Ahead of Key Data

U.S. stocks are facing a key test as they reach new heights, driven by a technology-led surge that has pushed the S&P 500 to an all-time high. The index gained 5.75% over four sessions, its biggest four-day advance since April 2025.

Investors are focusing on Wednesday's U.S. CPI report, which is expected to show July inflation at 3.4%. Markets price in a nearly 60% chance of a September Fed rate hike, with the outcome dependent on CPI, PPI, and retail sales data due this week.

The Philadelphia SE Semiconductor index has surged 70% year-to-date but remains over 17% below its late-June high. This volatility highlights ongoing uncertainty ahead of major tech earnings next week.