The S&P 500 climbed 0.3% Wednesday after July's consumer price index matched forecasts, easing worries about a near-term Federal Reserve rate hike. AI-linked stocks led the advance, with CoreWeave and Super Micro Computer posting double-digit gains on strong earnings, while memory-chip makers rallied on rising demand for AI hardware.
The S&P 500 rose 0.3% on Wednesday, while the Nasdaq Composite added 0.6% and the Dow Jones Industrial Average traded near the flatline. The index had opened stronger, up as much as 0.5% just after 9:30 a.m. ET, before paring gains through the morning.
July inflation matches forecasts
July's consumer price index rose 0.1% on the month, putting the annual rate at 3.4%, matching consensus estimates. Core CPI, which excludes food and energy, increased 0.2% for the month and 2.5% over the past year, with both annual readings down from June.
Following the report, odds that the Fed will leave rates unchanged next month rose to roughly 62%, up from more than 45% a week earlier, according to the CME FedWatch tool. However, fed funds futures still price a 73% chance of a rate hike in December and better than 53% odds of one in October. Oil prices added to the backdrop, pushing above $83 a barrel as hopes for a reopening of the Strait of Hormuz dwindled.
AI names drive the gains
CoreWeave shares jumped 18% after the cloud infrastructure company's second-quarter adjusted operating income margin of 5% exceeded expectations. Its revenue also doubled from a year ago. Super Micro Computer added 17% after issuing a strong earnings and revenue forecast. Dell Technologies advanced more than 6% on the same session. Micron Technology gained nearly 7%.
Memory chips add to the rally
SK Hynix jumped 7.2% on strengthening demand forecasts for the memory chips used in AI accelerators. Nvidia rose 2.7%, adding roughly $145 billion in market value, the biggest single contribution to the S&P 500's advance. The indexes gave back most of their initial gains as the session wore on, a sign the inflation print was largely priced in before the opening bell.
Sources: CNBC, The Motley Fool
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