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Nasdaq rises 1% as Wall Street recovers
Stocks swung wide on Wednesday, trading in wide ranges, as traders weighed what the latest U.S. inflation data means for Federal Reserve policy. Technology stocks led a rebound from the session’s sharp lows.
The S&P 500 traded 0.3% higher. The Dow Jones Industrial Average lost 112 points, or 0.3%, after falling as much as 743.89 earlier in the day. The Nasdaq Composite added 1.2%, also recovering earlier losses.
In the technology sector, Nvidia and Apple rose more than 2% and 1%, respectively, helping lift the tech-heavy Nasdaq.
In addition, UnitedHealth Group, Goldman Sachs and Amgen dragged the Dow lower.
The consumer price index report released Wednesday reflected a 0.2% increase in prices last month, with the annual inflation rate coming in at 2.5%, the lowest since February 2021. The CPI was expected to rise 0.2% in the previous month and 2.6%, compared to a year ago, according to Dow Jones Industrial Average estimates.
However, the core CPI on a monthly basis, which excludes volatile food and energy prices, came in slightly hotter than expected.
Investors are still betting on a widely expected rate cut at the U.S. Federal Reserve’s Sept. 17-18 meeting.
Traders are 85% expecting the Federal Open Market Committee to agree to a 25 basis point rate cut, according to the CME Group’s FedWatch gauge.
“Given the current situation, with the Fed cutting rates, unemployment near multi-decade lows and the economy expanding despite slowing, the market should be able to reclaim all-time highs once the volatility that precedes most presidential elections is over,” said Chris Zaccarelli, chief investment officer at Alliance of Independent Advisors.
