The S&P 500 moved higher on Wednesday, supported by a softer-than-expected market reaction to the latest U.S. inflation data and strong gains across technology and artificial intelligence-related stocks.
The broad-market index gained 0.26% to close at 7,748.50, while the Nasdaq Composite advanced 0.54% to finish at 26,588.49. The Dow Jones Industrial Average slipped 21.58 points, or 0.04%, ending the session at 53,770.27.
The July Consumer Price Index came broadly in line with expectations. Headline CPI increased 0.1% month over month, while annual inflation stood at 3.4%. Core CPI, which excludes food and energy prices, rose 0.2% for the month and 2.5% from a year earlier. Both annual headline and core inflation eased slightly from June.
The inflation report helped strengthen expectations that the Federal Reserve could keep interest rates unchanged at its next meeting. Markets are now pricing in roughly a 60% probability that the Fed will maintain its benchmark rate at 3.50% to 3.75%, up from more than 45% a week earlier.
However, inflation risks remain a concern for policymakers, particularly as U.S. crude oil prices climbed above $83 a barrel amid fading hopes of a reopening of the Strait of Hormuz.
Technology stocks provided additional support to the broader market. CoreWeave and Super Micro Computer both surged around 19% after reporting strong quarterly results and encouraging outlooks, easing concerns about demand for AI infrastructure.
Other AI-related companies also posted solid gains. Dell Technologies climbed nearly 10%, Micron Technology rose almost 5%, and Cisco Systems added close to 3%. U.S.-listed shares of Dutch cloud infrastructure company Nebius also jumped 34%.
Overall, the session reflected a combination of easing inflation concerns, shifting expectations for Federal Reserve policy, and renewed investor confidence in the continued strength of AI-related demand.
