(Updates with market moves at the end of the day, and other changes, if any.)
The Nasdaq Composite and the S&P 500 rebounded Wednesday after a two-day decline, as tame consumer inflation in July prompted traders to trim bets for a Federal Reserve interest rate hike next month.
The technology-heavy Nasdaq rose 0.5% to close at 26,588.49, while the S&P 500 climbed 0.3% to 7,748.50. The Dow Jones Industrial Average ended little changed at 53,770.27. Most sectors advanced, led by real estate and tech, while consumer discretionary saw the steepest decline.
US annual consumer inflation came in at 3.4% in July, easing from 3.5% the month prior and marking the slowest pace of price growth since March, official data showed. Core inflation, which excludes volatile food and energy items, eased to 2.5% from June's 2.6%. Both prints matched the forecasts in a Bloomberg-compiled survey.
On a month-on-month basis, consumer prices rose 0.1% in July following a 0.4% drop the month prior. Core prices rose to 0.2% after holding steady in June.
"Both the headline and core CPI in July were benign enough to reinforce our baseline forecast for a prolonged pause by the Federal Reserve over the remainder of the year," Oxford Economics said in a note. "Market expectations for a September rate hike have also downshifted on the back of the July CPI."
The probability of the Fed keeping its benchmark lending rate unchanged next month increased to 60% Wednesday from 52% Tuesday, according to the CME FedWatch tool. The odds that the central bank will hike interest rates by 25 basis points fell to 40% from 48%.
US Treasury yields were mixed, with the two-year yield down 1.5 basis points at 4.2% and the 10-year yield marginally higher at 4.69%.
In company news, Super Micro Computer (SMCI) shares jumped 19%, the top performer on the S&P 500. Late Tuesday, the company issued an upbeat fiscal 2027 revenue outlook.
Lumentum (LITE) followed Super Micro on the S&P 500, up nearly 14%. Late Tuesday, Lumentum delivered a fiscal fourth-quarter beat.
Home Depot (HD) shares fell 3.1%, the biggest decline on the Dow, after the company said Chief Executive Ted Decker is taking a temporary medical leave of absence.
West Texas Intermediate crude oil was down 0.3% at $82.99 a barrel in Wednesday late-afternoon trade, while Brent fell 0.2% to $88.71.
The International Energy Agency projected a larger decline in global oil demand this year than previously estimated as the continued closure of the Strait of Hormuz weighs on consumption. Separately, the Organization of the Petroleum Exporting Countries lowered its global oil demand growth outlook for 2026 while projecting a stronger rebound for next year than previously estimated.
Iran could "prolong" war with Washington until US President Donald Trump is out of office, CNN reported Wednesday, citing a top adviser to the commander of Tehran's Islamic Revolutionary Guard Corps.
Spot gold rose 0.9% to $4,410.90 per troy ounce, while silver advanced 0.9% to $65.54 per ounce.
