The S&P 500 climbed 0.3% on Wednesday after July's inflation report matched forecasts, easing pressure on the Federal Reserve to raise rates. Gains in AI-linked stocks CoreWeave and Super Micro Computer drove the Nasdaq Composite to a sharper 0.7% advance.
The S&P 500 rose 0.3% on Wednesday, lifted by a tame July inflation report and strong earnings from AI infrastructure companies. The Nasdaq Composite added 0.7%, while the Dow Jones Industrial Average traded near the flatline.
Inflation data matches forecasts
July's consumer price index rose 0.1% on the month, putting the annual rate at 3.4%. Core CPI, which excludes food and energy, advanced 0.2% for the month and 2.5% on the year — both annual readings a slight decrease from June.
The Fed has been focused on the pricing pressure facing consumers, and three officials dissented at the last meeting to vote for a rate hike. Those concerns haven't eased, with U.S. oil prices pushing above $83 a barrel Wednesday as hopes dwindle for a reopening of the Strait of Hormuz.
Rate-hike odds ease after the report
Following the report, fed funds futures now price in a roughly 60% chance the Fed holds its benchmark rate steady at its current 3.50%-to-3.75% range next month. That's up from more than 45% a week ago, according to the CME FedWatch tool.
AI earnings power the tech rally
CoreWeave shares jumped 18% after the cloud infrastructure company's second-quarter adjusted operating income margin of 5% beat expectations, while its revenue doubled from a year earlier. Super Micro Computer added 17% following a strong earnings and revenue forecast for its first quarter.
Other AI-linked names advanced too. Dell Technologies and Micron Technology gained more than 6% and nearly 7%, respectively, while Cisco Systems rose more than 1%. U.S.-listed shares of Dutch cloud specialist Nebius climbed more than 27%.
Source: CNBC
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