US Stocks Rally on Easing Inflation, Fed Rate Hike Odds Dim
US stocks rallied on Wednesday as July inflation data showed price growth easing. The Dow Jones Industrial Average held steady near the flatline, while the S&P 500 rose 0.3% and the Nasdaq Composite jumped 0.6%. Tech stocks led the gains, with AI-focused companies delivering strong quarterly results.
The Consumer Price Index (CPI) rose by a modest 0.1% from June to July, with annual inflation ticking down to 3.4%. The core CPI, which excludes food and energy prices, increased 0.2% for the month and 2.5% year-over-year.
The data offered some relief to investors concerned about renewed price pressures, strengthening expectations that the Federal Reserve may keep interest rates unchanged at its next meeting. Fed funds futures showed a 62% chance of rates remaining between 3.50% and 3.75%, up from around 45% just last week.
AI stocks gained momentum as CoreWeave and Super Micro Computer reported strong quarterly results, with CoreWeave's shares rising 18%. Dell Technologies and Micron Technology advanced more than 6% each, while Cisco Systems added over 1%.