US STOCKS-Wall St zig-zags higher after selloff; Nvidia outstrips Alphabet in market cap

Wall Street edged higher in volatile trading on Wednesday after a selloff in the prior session on a hot inflation report, while Nvidia topped Alphabet's market value to become the third-most valuable U.S. company. Nvidia overtook Alphabet's

market capitalization , days before the poster child of AI boom is due to report its fourth-quarter results. Nvidia's shares were up 0.7% while the Google-parent lost 0.2%.

"If AI is truly going to be a game changer for the world, Nvidia is at the forefront of all of that," said Dennis Dick, founder and market structure analyst at Triple D Trading. Rate-sensitive megacap Meta Platforms and other chip stocks like Advanced Micro Devices and Qualcomm gained between 1.8% and 2.5%.

The indexes had slumped to over one-week lows on Tuesday and the blue-chip Dow posted its worst day in 11 months, as core consumer prices in January stayed at nearly double the Fed's 2% target, forcing investors to reassess their rate cut expectations. Providing some relief were Chicago Fed President Austan Goolsbee's comments that the path back to 2% inflation target would still be on track even if price increases run a bit hotter-than-expected going ahead, and the central bank should be wary of waiting too long before cutting rates.

"I think the inflation trend is still very friendly to this market and a lot of people who are still under-invested in this market are using the dip to get in," Dick added. Euphoria around an early start to monetary policy easing had fueled a Wall Street rally since November, paving the way for a bull market for the S&P 500 this year.

However, policymakers might have to wait a bit longer for more evidence of easing price pressures in the face of a resilient U.S. economy. Bets for an at least 25-basis-point rate reduction in May stood at 35%, down from 63% earlier in the week, while expectations for June stood at 81%, the CME FedWatch tool showed.

At 11:34 a.m. ET, the Dow Jones Industrial Average was up 54.02 points, or 0.14%, at 38,326.77, the S&P 500 was up 21.70 points, or 0.44%, at 4,974.87, and the Nasdaq Composite was up 89.70 points, or 0.57%, at 15,745.30. Uber gained 11.7% to notch a record high, boosted by a $7 billion share buyback plan, steering a 1% advance in the industrial sector that led sectoral gains. The small-caps Russell 2000 index also added 1.2%.

Lyft surged 32.9% after the ride-hailing platform's profit beat estimates and it said it would generate positive free cash flow for the first time in 2024. Robinhood Markets jumped 9.4% following a surprise fourth-quarter profit.

Crypto stocks like Coinbase, Marathon Digital and Riot surged between 10.8% and 12.4% as bitcoin's market value crossed $1 trillion for the first time since Nov. 21. Advancing issues outnumbered decliners by a 4.00-to-1 ratio on the NYSE and a 3.01-to-1 ratio on the Nasdaq.

The S&P index recorded 26 new 52-week highs and two new lows, while the Nasdaq recorded 57 new highs and 51 new lows.