Inflation Fears Boost Rate Hike Bets Ahead of Nvidia Earnings

Wall Street's main indexes were subdued on Wednesday as investors awaited Nvidia's quarterly earnings. The Commerce Department reported that annual U.S. inflation increased 3.7% in the 12 months through July, just above the 3.6% expected by analysts.

This hotter-than-expected inflation bolstered bets on a September interest rate hike, with Fed funds futures showing about a 44% chance of a rate increase, up from roughly 36% just before the data release.

Jeff Buchbinder, chief equity strategist at LPL Financial, said 'We're clearly still in a period where inflation is sticky and it's temporarily putting upward pressure on interest rates - an important factor in keeping this bull market for stocks going.'