U.S. equities finished mixed on Wednesday, with the S&P 500 and Nasdaq Composite advancing on the back of robust gains in artificial intelligence infrastructure names and a softer-than-expected inflation reading, while the Dow Jones Industrial Average edged lower.
The S&P 500 added 0.26% to close at 7,748.50, and the tech-heavy Nasdaq Composite climbed 0.54% to 26,588.49. In contrast, the Dow slipped 21 points, or 0.04%, to 53,770, as a pullback in some traditional sectors offset the tech-led advance.
Investor sentiment got a boost after the July Consumer Price Index (CPI) came in line with expectations, reinforcing the view that the Federal Reserve will likely hold interest rates steady at its September policy meeting. Headline inflation rose 0.1% month-over-month and 3.4% year-over-year, while core CPI, which strips out volatile food and energy prices, increased 0.2% on the month and 2.5% annually—both slightly cooler than June's readings.
According to CME FedWatch data, traders now assign roughly a 60% to 62% probability that the Fed will keep its benchmark rate unchanged in September, up from an evenly split outlook before the report. The data helped ease concerns that persistent price pressures might force another hike, though elevated energy costs remain a watchpoint.
Oil prices stayed above $83 per barrel for U.S. crude, as geopolitical tensions in the Middle East and ongoing shipping disruptions kept energy markets volatile. Investors continued to monitor developments around U.S.-Iran negotiations and attacks on commercial vessels, which have raised supply concerns.
AI Infrastructure Stocks Lead the Charge
Artificial intelligence infrastructure companies were the primary drivers of Wednesday's gains, following another round of strong earnings and optimistic guidance. CoreWeave surged after reporting second-quarter results that beat expectations and raising its full-year capital expenditure forecast, reinforcing confidence that spending on AI data centers remains robust.
Super Micro Computer also rallied sharply after projecting fiscal 2027 revenue well above Wall Street estimates, fueling optimism across the semiconductor and AI hardware sectors. The positive momentum spread to other names, including Nvidia, Micron Technology, Dell Technologies, and Cisco Systems.
Data center operators also posted solid gains, with IREN and Applied Digital advancing during the session. Nebius Group climbed strongly after delivering quarterly results that surpassed analyst estimates, adding further evidence that enterprise demand for AI computing infrastructure is healthy.
Corporate Earnings Still in Focus
Beyond AI-related companies, investors continued to react to earnings across various industries. Restaurant chain Cava Group advanced after reporting stronger-than-expected second-quarter sales and core profit, while reaffirming its outlook.
The market's mixed close underscores the ongoing tug-of-war between optimism over AI-driven growth and concerns about inflation, energy prices, and geopolitical risks. As investors digest the latest data and corporate updates, the path for equities remains uncertain, with the Fed's next move and third-quarter earnings season likely to set the tone.
For more on how inflation data is shaping market expectations, see our earlier coverage on July CPI and AI earnings. Also, check out our analysis of AI chip stock volatility and leading AI application stocks.
This article is for informational purposes only and does not constitute financial advice.
