CashNews.co
US stocks reversed early losses to close higher on Wednesday as investors digested an inflation report that showed consumer price increases ticked lower in August.
The benchmark S&P 500 (^GSPC) rose more than 1%, while the tech-heavy Nasdaq Composite (^IXIC) led the charge, rising almost than 2.2%. Meanwhile, the Dow Jones Industrial Average (^DJI) popped about 0.2%, or more than 100 points. Nvidia (NVDA) led the rally in tech with shares soaring over 8% as CEO Jensen Huang spoke at a Goldman Sachs conference.
Investors had been looking to August’s consumer price index to lift the uncertainty around the size of the Federal Reserve’s first interest-rate cut in years. The data showed headline inflation slipping to a more than three-year low. But “core” prices, which strip out the more volatile costs of food and gas, climbed 0.3% over the prior month, above the 0.2% economists had expected.
After a mixed monthly jobs report, the price data was expected to help settle the debate over whether to expect a 0.5% or 0.25% easing in the Fed’s policy decision next week. And after the hotter-than-expected month-over-month increase for core inflation, traders are now favoring a smaller cut from the Fed at its meeting next week.