50BP Cut A Far Off Dream? – US Market Wrap

A rally in the world’s largest technology companies spurred a stock-market rebound in a volatile session that had Wall Street traders digesting faster-than-anticipated inflation data.

The S&P 500 climbed 1.1% and the Nasdaq 100 rallied 2.2%. It was the first time since October 2022 that each gauge erased an intraday loss of at least 1.5%. Chipmakers led gains, with Nvidia up 8%. Treasury two-year yields edged up on bets the Federal Reserve will move gradually with rate cuts. Swap traders have fully priced in a quarter-point Fed reduction next week.

The S&P 500 closed near 5,555. The Dow Jones Industrial Average rose 0.3%. The Russell 2000 Index of smaller companies added 0.3%.

Treasury 10-year yields advanced one basis point to 3.66%. The dollar fell. Oil climbed as Hurricane Francine ripped through key oil producing zones in the US Gulf of Mexico, prompting traders to cover bearish bets.

The so-called core consumer price index, which excludes food and energy costs, increased 0.3% from July, the most in four months, and 3.2% from a year ago, Bureau of Labor Statistics figures showed Wednesday. The three-month annualised rate advanced 2.1%, picking up from 1.6% in July.