Wall Street Edges Higher Amid Moderating Inflation

Wall Street's main indexes saw slight gains in volatile trading after data showed U.S. inflation moderated as expected. The Federal Reserve is likely to begin easing its policy next month. Technology and financial sectors led gains while Google-parent Alphabet slipped. Bets on a Fed rate cut increased.

Wall Street's main indexes edged higher amid volatile trading on Wednesday following data that showed inflation was moderating as expected. This has solidified anticipations that the U.S. Federal Reserve is on track to start easing its policy next month.

The Labor Department reported that U.S. consumer prices increased by 0.2% in July as anticipated, bringing headline inflation to 2.9% year-on-year, down from 3% in June. This was below economists' expectations of 3% growth. David Doyle, head of economics at Macquarie, stated, "There is nothing here that should prevent the Fed from proceeding with a rate cut in September."

Bets on a 25-basis point rate cut during the Fed's Sept. 17-18 meeting increased, with traders seeing a nearly 59% chance, compared to a previous even split between a 25-bps and 50-bps cut, according to the CME FedWatch Tool. Information technology and financial sectors led gains, helping the S&P 500 and Nasdaq achieve their fourth consecutive session of gains.

At 09:35 a.m. ET, the Dow Jones Industrial Average rose 10.79 points to 39,776.43, the S&P 500 gained 4.15 points to 5,438.58, and the Nasdaq Composite went up 19.38 points to 17,206.98. The Cboe volatility index remained below its long-term average of 20 points for the second day, at 17.47.

Big names like Nvidia, Super Micro, and Dell led early advances, while Alphabet slipped 1.5% following a report that the U.S. Department of Justice is considering options that include breaking up the online search giant. Kellanova surged over 7% after Mars announced plans to acquire it in a nearly $36 billion deal. Cardinal Health gained 3.5% after raising its 2025 profit forecast, while Intuit dropped 1.8% following a rating downgrade by Morgan Stanley.

On the NYSE, advancing issues outnumbered decliners by a 2.09-to-1 ratio, and by a 1.37-to-1 ratio on the Nasdaq. The S&P 500 posted eight new 52-week highs and one new low, while the Nasdaq Composite recorded 24 new highs and 30 new lows.

(With inputs from agencies.)