US stock market: S&P 500 ends higher as CPI data cements bets for Fed pause
Nasdaq ended higher on Wednesday after data showing a moderate increase in consumer prices in August cemented expectations that the Federal Reserve will leave interest rates unchanged in September.
Megacap growth stocks Tesla, Meta Platforms, Microsoft and Amazon.com gained over 1% each.
Apple dipped 1.2%, down for a second day after unveiling new iPhones on Tuesday while leaving prices unchanged.
The S&P 500 climbed 0.12% to end the session at 4,467.44 points.
The Nasdaq gained 0.29% to 13,813.59 points, while the Dow Jones Industrial Average declined 0.20% to 34,575.53 points.
The S&P 500 consumer discretionary index climbed 0.9%, lifted as Ford Motor rallied 1.5% on the vehicle maker's plans to double the production of its hybrid F-150 pickup trucks in 2024.
Data showed consumer prices increased by the most in 14 months in August as gasoline prices surged, but the annual rise in underlying inflation was the smallest in nearly two years.
Stickiness in services inflation has kept alive prospects of a November hike.
Interest rate traders now see a 97% chance of the Fed holding rates in September, and a 61% likelihood of a pause in November, according to the CME FedWatch Tool.
«I don't think the Fed wants to throw a shock and do a 25-basis-point hike when the expectations are that they won't, but rate hikes are not completely off the table for the rest of the year,» said Victoria Fernandez, chief market strategist at Crossmark Global Investment.
Gasoline prices, which have stoked inflation worries, peaked at $3.984 per gallon in the third week of the month, compared with $3.676 per gallon during the same period in July.
The S&P 500 utilities index gained 1.2%, with the traditionally defensive sector's rally hinting at
