Fed Rate Cut Bets Rise Despite Tech Stock Dips

Wall Street's main indexes exhibited mixed movements amid lower trading activity, influenced by Alphabet and some tech stocks dipping. However, encouraging inflation data fortified investor sentiment that the Federal Reserve would cut interest rates next month. Financial stocks led gains, overshadowing weakness in the tech sector.

Wall Street's main indexes presented a mixed picture on Wednesday, with Alphabet and other megacap tech stocks trading lower. However, the latest inflation data boosted investor confidence that the Federal Reserve might cut U.S. interest rates next month.

Trading was generally subdued, with many investors away on a mid-August afternoon and no new trading triggers, contributing to a listless benchmark scenario. Alphabet's 3.2% drop followed reports of a potential breakup by the U.S. Department of Justice. This loss weighed on the Nasdaq and led the communication services sector to a 1.3% decline. Mixed performances were seen among other megacaps: Tesla fell 3.5%, Meta Platforms dropped 0.4%, while Microsoft and Nvidia posted gains of 0.6% and 0.7%, respectively.

At 2:00 p.m. EDT, the S&P 500 climbed 11.88 points (0.22%) to 5,446.31, while the Nasdaq Composite lost 40.67 points (0.24%) to 17,146.73. The Dow Jones Industrial Average rose 257.24 points (0.64%) to 40,022.88. Despite recent volatility, a rebound in tech and megacap stocks has helped markets recover from earlier losses this month.

(With inputs from agencies.)