US stocks reversed early losses to close higher on Wednesday, with investors reacting to a new inflation report. The S&P 500 (^GSPC) climbed over 1%, while the Nasdaq Composite (^IXIC) surged nearly 2.2%. The Dow Jones Industrial Average (^DJI) also saw a modest gain of 0.2%, adding over 100 points. Nvidia (NVDA) led the tech rally with a dramatic 8% rise following CEO Jensen Huang’s speech at a Goldman Sachs conference.
August’s consumer price index revealed a slight decline in headline inflation, reaching a three-year low. However, “core” inflation, excluding food and gas, rose by 0.3%, surpassing the 0.2% forecast. This data has influenced expectations for the Federal Reserve’s interest rate decision next week, with traders now leaning towards a smaller 0.25% cut rather than a 0.5% reduction.
Meanwhile, GameStop (GME) shares dropped almost 12% due to a disappointing revenue report and plans to issue 20 million new shares.