New York CNN  —  Stocks surged Tuesday as Wall Street raised its bets that sky-high borrowing rates could come down in the fall. The Dow surged by more than 700 points, or 1.8%, hitting a fresh all-time high and extending its winning streak. The S&P 500 gained 0.5% and the Nasdaq Composite was 0.1% higher. Investors were feeling buoyant after a round of robust corporate earnings and a better-than-expected consumer spending report. The Commerce Department reported Tuesday that US retail sales were stronger than expected in June, after mostly flat readings for the first half of the year. The figures are adjusted for seasonal swings but not inflation. Spending at US retailers has been mostly flat since the beginning of the year. FreshSplash/E+/Getty Images Related article Stocks surge after retail sales data shows Americans are still shopping The show of resilience has helped raise optimism that the Fed will begin cutting rates in September. Wall Street now sees a near 100% expectation that the Federal Reserve will cut interest rates then, according to the CME FedWatch Tool. Gold futures rose 1.4% after hitting a record high earlier in the day. Encouraging inflation data last week had already led investors to raise their bets that the Fed would begin cutting rates in September. “A September rate cut should be a done deal at this point,” wrote Ron Temple, chief market strategist at Lazard, in a Thursday note. BNP Paribas economists on Thursday updated their base case to reflect a rate cut in September, citing the mix of June inflation and jobs data. They expect two quarter-point cuts in 2024. This is a developing story and will be updated.