The S&P 500 and the Nasdaq ended higher on Wednesday, lifted by upbeat quarterly results from CoreWeave and other AI infrastructure firms, while mild inflation data reinforced bets that the U.S. Federal Reserve will hold interest rates steady in September. U.S. consumer prices barely increased in July as the cost of gasoline declined for a second straight month, while underlying inflation was benign, further reducing expectations of an interest rate hike from the Federal Reserve next month.
“The numbers came in right in line. The market’s reaction is slightly positive because the market was fearful it was going to come in worse than it did. You’re seeing a market thinking that the Fed is not being pushed toward a rate hike,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut. CoreWeave surged after the AI cloud company lifted its annual capital spending forecast and topped second-quarter earnings estimates.
Data center operators also rose, with IREN and Applied Digital both up. Data center company Nebius Group jumped following second-quarter results that beat expectations. Super Micro Computer surged after the AI server maker forecast fiscal 2027 revenue above Wall Street expectations.
Chipmakers gained, with Nvidia and Micron Technology both climbing.
According to preliminary data, the S&P 500 gained 20.38 points, or 0.26%, to end at 7,748.58 points, while the Nasdaq Composite gained 145.70 points, or 0.55%, to 26,588.49. The Dow Jones Industrial Average fell 30.28 points, or 0.06%, to 53,761.57. Traders are now pricing in a 62% chance of the Fed holding rates at its September meeting, according to CME’s FedWatch Tool. Before the July inflation data was released, bets were split between a hike and no change.
The conflict between the U.S. and Iran remained volatile as a senior Iranian source said there had been no progress in talks to revive the interim deal reached in June and define a time frame to implement it, while shipping attacks continued. Cava Group advanced after the restaurant chain beat Wall Street expectations for second-quarter sales and core profit. Lumentum Holdings surged after the photonic product maker forecast first-quarter revenue above analysts’ expectations and beat fourth-quarter estimates.