Key Highlights

  • The S&P 500 gained 0.26% and the Nasdaq Composite rose 0.55%, while the Dow Jones Industrial Average slipped 0.06%
  • CoreWeave (NASDAQ:CRWV) shares surged after the company lifted its annual Capital spending forecast and topped second-quarter Earnings estimates
  • Super Micro Computer (NASDAQ:SMCI) also surged after forecasting fiscal 2027 Revenue above Wall Street expectations
  • Traders are now pricing in a 62% chance the Federal Reserve holds rates steady at its September meeting, up from split odds before the Inflation data

AI Infrastructure Stocks Lift Broader Market

The S&P 500 and the Nasdaq ended higher Wednesday, lifted by upbeat quarterly results from CoreWeave and other AI infrastructure companies, while mild inflation data reinforced bets that the Federal Reserve will hold interest rates steady in September. US consumer prices barely increased in July as the cost of gasoline declined for a second straight month, while underlying inflation remained benign, further reducing expectations of a Fed rate hike next month.

A senior portfolio manager said the inflation numbers came in right in line with expectations, and the market's slightly positive reaction reflected relief that the data did not come in worse than feared, reinforcing the view that the Fed is not being pushed toward a rate hike.

CoreWeave and Data Center Stocks Lead Gains

CoreWeave shares surged after the AI cloud company lifted its annual capital spending forecast and topped second-quarter earnings estimates. Other data center operators also rose, with several posting gains after strong results, and a separate data center company jumped following second-quarter results that beat expectations. Super Micro Computer surged after the AI server maker forecast fiscal 2027 revenue above Wall Street expectations, while major chipmakers also climbed.

According to preliminary data, the S&P 500 gained 20.38 points, or 0.26%, to end at 7,748.58, while the Nasdaq Composite gained 145.70 points, or 0.55%, to 26,588.49. The Dow Jones Industrial Average fell 30.28 points, or 0.06%, to 53,761.57.

Fed Rate Expectations Shift as Iran War Tensions Persist

Traders are now pricing in a 62% chance of the Federal Reserve holding rates steady at its September meeting, according to Futures Market data, up from roughly even odds before the July inflation report was released. The conflict between the US and Iran remained volatile, with a senior Iranian source saying there had been no progress in talks to revive the interim deal reached in June, while shipping attacks in the region continued.

Elsewhere in the market, a restaurant chain advanced after beating Wall Street expectations for second-quarter sales and core profit, while a photonic products maker surged after forecasting first-quarter revenue above analyst expectations and beating fourth-quarter estimates.