Stock Market Indexes Bounce on Cooler Inflation Data

The stock market indexes rallied on Wednesday after inflation data showed a slowdown in price increases. The Nasdaq Composite rose 1.1%, while the S&P 500 increased by 0.6%. However, the Dow Jones Industrial Average remained flat.

The Core PCE index, which is closely watched by the Federal Reserve, rose just 0.2% in August for an annual rate of 3%. This was below the expected 0.3% and 3.3%, respectively. As a result, Treasury yields dropped, and traders moved the next expected interest rate hike from October to December.

The tech sector led the rally, with Alphabet rising 3.1% after signing an AI accord with the White House. Apple jumped 2.4% on reports of a new smart home hub release. However, the Dow's heavyweights, such as Caterpillar and Goldman Sachs, fell around 1%, canceling out the gains from the tech sector.

Micron Technology is set to report its fiscal fourth-quarter results after Wednesday's close, which could move the market on Thursday. The September jobs report will be released on Friday, which may impact expectations for future interest rate hikes.