U.S. stocks ended Wednesday in positive territory as investors welcomed fresh signs that inflation is easing, boosting confidence in the broader market. Strength in major technology companies helped offset weakness in semiconductor stocks.
The S&P 500 gained 0.38% to close at 7,572.40, while the Nasdaq Composite advanced 0.62% to 26,269.23. The Dow Jones Industrial Average rose 150.37 points (0.29%), finishing at 52,658.64.
Market participants rotated into large-cap technology stocks, with Apple surging 4% to a record closing high. Amazon, Alphabet, and Microsoft also posted gains of nearly 3%, reflecting continued investor confidence in the sector.
Meanwhile, semiconductor shares came under pressure. Micron Technology dropped 8%, Intel fell more than 4%, while Advanced Micro Devices and Lam Research each declined around 3%. The VanEck Semiconductor ETF (SMH) also slipped by more than 1%.
Investor sentiment was supported by encouraging inflation data and comments from New York Fed President John Williams, who said there are positive signs that inflation has likely peaked and should continue to ease in the coming months.
Adding to the optimism, the Producer Price Index (PPI) unexpectedly declined 0.3% in June, compared with expectations for no monthly change. Annual producer inflation slowed to 5.5%, reinforcing Tuesday's softer-than-expected Consumer Price Index (CPI) report.
The back-to-back inflation reports strengthened expectations that the Federal Reserve may take a less aggressive approach to future interest rate hikes. While traders have reduced the likelihood of an immediate rate increase, markets still anticipate at least one additional hike later this year, with current pricing indicating roughly a 60% chance of higher rates by the conclusion of the October Fed meeting.
