US stocks end mostly higher after inflation data, AI shares rally

US stocks closed mostly higher Wednesday as inflation data met market expectations and strong corporate results fueled gains in artificial intelligence-related shares.

The S&P 500 rose 0.26%, or 20.3 points, to finish at 7,748.5.

The Nasdaq Composite gained 0.54%, or 143.04 points, to close at 26,588.49, while the Dow Jones edged down 0.04%, or nearly 21.58 points, to 53,770.27.

The CBOE Volatility Index, also known as the “fear index,” fell 4.78% to 14.55, its lowest level since January.

The US Consumer Price Index rose 0.1% month-on-month and 3.4% annually in July, both in line with market expectations.

Core inflation, which excludes volatile food and energy prices, increased 0.2% on a monthly basis and 2.5% year-on-year. The annual rates for both headline and core inflation eased slightly from June.

Following the data, money markets increased bets that the US Federal Reserve would leave its policy rate unchanged at its September meeting.

Fed funds futures priced in an approximately 60% probability that the central bank would maintain its benchmark rate within the 3.5%-3.75% range, compared with slightly more than 45% a week earlier.

The Fed kept its policy rate unchanged at its latest meeting, although three policymakers dissented in favor of an increase.

Technology shares led Wednesday’s advance after quarterly results and forecasts from CoreWeave and Super Micro Computer reinforced expectations of continued demand for AI infrastructure.

CoreWeave shares jumped around 18% after the cloud infrastructure company’s quarterly revenue doubled from a year earlier and its adjusted operating margin exceeded expectations.

Super Micro Computer climbed 17% after issuing stronger-than-expected revenue and earnings guidance for its fiscal first quarter.

Other AI-linked shares also advanced, with Dell Technologies gaining around 10%, Micron Technology nearly 5% and Cisco Systems more than 2.8%. US-listed shares of Dutch cloud infrastructure company Nebius surged more than 34%.

Gold prices rose 0.9% to $4,410 per ounce, while US benchmark West Texas Intermediate crude slipped 0.3% to around $82.90 per barrel.

European stocks close lower

European stock markets ended Wednesday’s session in negative territory as investors monitored uncertainty surrounding diplomatic efforts in the Middle East.

The STOXX Europe 600 index declined 0.16% to close at 659.48 points.

Germany’s DAX 40 fell 0.23% to 26,331.07 points, while France’s CAC 40 lost 0.46% to finish at 8,674.94.

Italy’s FTSE MIB edged down 0.01% to 53,698.66, while the UK’s FTSE 100 decreased 0.1% to 10,833.15.

Spain’s IBEX 35 index fell 0.05% to end the session at 20,204.4.