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Update: Equities Fall as Traders Assess Inflation Data

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Update: Equities Fall as Traders Assess Inflation Data

(Updates with market moves at the end of the day, and other changes, if any.)

US stocks declined on Wednesday after a report showed the Federal Reserve's preferred inflation metric held steady well above its 2% target.

The Dow Jones Industrial Average fell 0.2% to 53,463.88 following a three-day advance. The Nasdaq Composite edged down 0.1% to 26,130.20, while the S&P 500 settled just below the flatline at 7,675.70.

Among sectors, healthcare saw the steepest decline, while industrials paced the gainers.

The Fed's preferred inflation measure, which excludes food and energy, held steady at 3.3% year over year in July, as projected. The monthly metric climbed 0.2%.

"As long as the month-on-month rate continues to come in close to 0.2%, the annual rate of inflation will converge on 2% over time, but the question is how much more patience the Fed actually has," ING Bank said in a report. "Markets continue to price a (25 basis point) rate hike before year-end while economists, in general, still favor an extended pause for policy rates."

Markets are currently pricing in a 64% probability that the Fed will keep its benchmark lending rate steady next month, with the remaining odds in favor of a 25-basis-point increase, according to the CME FedWatch tool.

US Treasury yields were mostly higher, with the 10-year yield up one basis point at 4.65% and the two-year yield rising 0.9 basis point to 4.21%.

In other economic news, US durable goods orders rose more than projected in July, led by strong demand for civilian aircraft, official data showed.

Nvidia shares fell 1.6% after advancing by 2.2% in the previous session. The chipmaking giant released its fiscal second-quarter results after Wednesday's closing bell.

In other company news, Intuit (INTU) shares fell 3.2%, among the notable declines on the S&P 500, after the tax and finance software maker overnight issued a soft fiscal 2027 outlook.

Zoom Communications (ZM) shares slumped 7% as the video communication platform late Tuesday provided a downbeat earnings outlook for its fiscal third quarter following a second-quarter beat.

Abercrombie & Fitch (ANF) shares surged about 36% after the apparel retailer raised its full-year outlook as tariff-related refund benefits helped the company post fiscal second-quarter results above Wall Street's estimates.

West Texas Intermediate crude oil was down 0.6% at $81.90 a barrel in Wednesday late-afternoon trade, while Brent fell 1.3% to $87.43.

Spot gold fell 1.4% to $4,594.49 per troy ounce, while silver lost 0.8% to $68.89 per ounce.

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