The S&P 500 closed at a record high Thursday, breaking above 7,800 for the first time in the index's history as traders bet the Federal Reserve will hold off on any further rate moves next month.

The broad index touched an intraday record of 7,808.42 before settling at a closing high of 7,798.99, lifted by gains in semiconductor and other heavyweight technology names. The tech-heavy Nasdaq 100 climbed roughly 1% on the day. Treasury two-year yields fell six basis points to 4.14%, and money markets now price in only about a 35% chance of a September rate move, down from roughly 50% just days earlier.

Cooler Prices, Calmer Traders

The rally was fueled by a tamer-than-expected reading on producer-price inflation and a retreat in crude oil prices, both of which eased investor anxiety about the path of borrowing costs heading into the fall. The gains mark the second straight day of advances for U.S. equities, part of a broader run that has also lifted markets overseas — South Korea's KOSPI has surged more than 20% from its late-July low on booming demand for AI-linked semiconductors, meeting the conventional definition of a bull market.

MORE EVIDENCE OF MODERATING INFLATION.

Norway's sovereign wealth fund, the world's largest at roughly $2.34 trillion, separately reported a record first-half profit of more than $184 billion, a 9.4% return driven in large part by the rally in Asian technology shares.

Market strategists caution that valuations are now historically stretched. The S&P 500 hasn't traded this expensive relative to corporate earnings in decades, and some analysts warn that a market this reliant on a handful of AI-linked megacap stocks is vulnerable to a sharp pullback if earnings disappoint or rate expectations shift again.

What's next: Traders will be watching next month's jobs and inflation data closely for any sign the Fed's rate path could change, with the central bank's next policy meeting widely seen as the key test for whether the record run continues.