Nasdaq leads way as inflation data boosts Wall Street
US stocks ended solidly higher on Wednesday, led by a gain of more than 1 percent in the Nasdaq after a report showed inflation subsided further with consumer prices registering their smallest annual increase in more than two years. The data underscored expectations the Federal Reserve may let interest rates stand after one more 25 basis point hike expected at its July policy meeting. Shares of big tech-related companies, which tend to be sensitive to higher interest rates, gave the S&P 500 its biggest boost. The technology sector was up 1.3 percent In the 12 months through June, the CPI advanced 3.0 percent. That was the smallest year-on-year increase since March 2021 and followed a 4.0 percent rise in May. Indexes eased off their early highs by late afternoon, but "bulls remain firmly in charge," said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles. "Clearly the CPI data we got was what the bulls wanted to see, and those that have been sitting on the sidelines hoping for a pullback continue to get frustrated." The Dow Jones Industrial Average rose 0.25 percent, to 34,347, the S&P 500 gained 0.74 percent, to 4,472 and the Nasdaq Composite added 1.15 percent, to 13,919. Investors have been weighing how much longer the Fed will need to raise rates to curb inflation. The Cboe Volatility Index, Wall Street's fear gauge, eased. The Labour Department report also showed the smallest monthly gain in underlying consumer prices since August 2021. "The market is sensing the Fed is getting closer and closer to that final one and done," said Quincy Krosby, chief global strategist at LPL Financial in North Carolina. Nvidia shares rose 3.5 percent after people familiar with the matter said SoftBank Group's chip designer Arm is in talks to bring in Nvidia as an anchor investor as it presses ahead with plans for a New York listing that could happen in September. Also, Nvidia said it will invest US$50 million to speed up training of Recursion's artificial intelligence models for drug discovery. Recursion shares were up 78 percent. (Reuters)