US stocks closed broadly higher Wednesday after a cooler-than-expected consumer price index report and strong earnings from artificial intelligence companies boosted investor sentiment.
The S&P 500 gained 0.30%, while the Nasdaq Composite jumped 0.59%, the Dow Jones Industrial Average advanced 0.11%, and the Russell 2000 rose 0.32%.
All readings came in line with Dow Jones consensus forecasts, reinforcing expectations that the Federal Reserve will hold interest rates steady at its September meeting.
Jeffrey Roach, chief economist for LPL Financial, acknowledged that inflation remains elevated but said the broader trend is moving in a positive direction.
Roach noted that “Energy prices fell in July as investors had high hopes that the Middle East crisis would improve,” pointing to easing commodity costs as a key driver of disinflation.
Bill Adams, chief U.S. economist at Fifth Third Commercial Bank, said “The July CPI report narrowly meets the bar to nudge the Fed toward holding rates steady at their next meeting in September.”
Roach added that inflation should decelerate to 2.7% by year-end as transportation and health care costs ease, though an increasing number of hawkish voting members could push for a rate hike.
The Dow Jones Industrial Average gained 147 points, or 0.27%, with Cisco Systems, Caterpillar, and Nvidia (NASDAQ: NVDA) leading gains at 2.04%, 1.79%, and 1.70% respectively.
McDonald’s, IBM, and Microsoft were the session’s top Dow laggards, falling 1.11%, 1.01%, and 0.98% respectively as investors rotated away from defensive and legacy tech names.
CoreWeave surged 20% after reporting stronger-than-expected sales results, while Super Micro Computer advanced nearly 15% following a revenue forecast that beat analyst expectations.
Hyperscalers and chip producers also caught a bid following strong results from Tencent, while investment firm Temasek took fresh stakes in SK Hynix and Samsung, signaling continued institutional confidence in the semiconductor sector.
The day’s broad gains reflect growing market conviction that the Fed’s tightening cycle is effectively over, with rate cuts remaining a longer-term possibility rather than an immediate prospect.
