The S&P 500 climbed 0.26 percent to 7,748.50, and the Nasdaq Composite added 0.54 percent to close at 26,588.49. AI-driven technology gains lifted the broad market index. The Dow Jones Industrial Average slipped 0.04 percent, or 21.58 points, settling at 53,770.27.
July's consumer price index (CPI) showed a monthly rise of 0.1 percent, with the annual inflation rate reaching 3.4 percent. Core CPI, which excludes food and energy, advanced 0.2 percent last month and 2.5 percent on the year. Both headline and core annual inflation rates decreased slightly from June's figures.
This inflation report increased the likelihood that the Federal Reserve will leave its benchmark interest rate unchanged next month. Fed funds futures trading now indicates a roughly 60 percent chance the central bank will maintain its current range of 3.50 percent to 3.75 percent, according to the CME FedWatch tool. This probability is up from more than 45 percent a week ago.
Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management, said, "In-line inflation will keep the no need to hike rates narrative that took hold after last week's jobs report intact." Zentner said another round of inflation data will precede the September FOMC meeting, but unless those numbers shift significantly, the Fed will likely hold rates steady.
In the artificial intelligence sector, CoreWeave shares jumped 19 percent after the cloud infrastructure company reported strong second-quarter results. Its adjusted operating income margin of 5 percent exceeded expectations, and revenue doubled from a year ago. This performance confirmed stable demand for AI infrastructure.
Super Micro Computer also added 19 percent to its share price. The company provided a strong earnings and revenue forecast for the first quarter, indicating strong demand for AI-related hardware and services.
Other stocks connected to artificial intelligence also saw gains. Dell Technologies advanced nearly 10 percent, while Micron Technology rose almost 5 percent. Cisco Systems increased close to 3 percent. Additionally, U.S.-listed shares of Dutch neocloud specialist Nebius gained 34 percent.
Despite the positive market reaction to inflation data, concerns about energy prices persist. U.S. oil prices rose above $83 a barrel on Wednesday. Hopes for a reopening of the Strait of Hormuz dwindled, contributing to the elevated prices. The Federal Reserve also acknowledged these pricing pressures, with three dissenters at the last meeting voting to raise rates.
Eight of the 11 S&P 500 sectors finished in positive territory on Wednesday. Information technology led the charge.
