Inflation Data Boosts Tech Stocks, But Dow Stays Grounded

The US stock market indexes experienced a rally on Wednesday morning after inflation data came in lower than expected. However, the Dow Jones Industrial Average remained flat.

The Nasdaq Composite climbed 1.1% and the S&P 500 added 0.6%, while the Dow's 30 components split evenly between gains and losses. The core PCE index, which is closely watched by the Federal Reserve, rose just 0.2% in August for an annual rate of 3%. Economists had predicted a 0.3% increase.

The mild inflation data led to a drop in Treasury yields, causing traders to push back their expected next rate hike from October to December. The tech sector was particularly strong, with Alphabet and Apple contributing significantly to the rally.