US Stocks Close Higher Despite Hotter-Than-Expected Inflation Data

NEW YORK, Sept 12 (Bernama-Xinhua) -- US stocks ended higher on Wednesday, rebounding from a slide that followed a slightly hotter-than-expected inflation report.

The Dow Jones Industrial Average rose 124.75 points, or 0.31 per cent, to 40,861.71. The S&P 500 added 58.61 points, or 1.07 per cent, to 5,554.13. The Nasdaq Composite Index increased 369.65 points, or 2.17 per cent, to 17,395.53, reported Xinhua.

Six of the 11 primary S&P 500 sectors ended in green, with technology and consumer discretionary leading the gainers by going up 3.25 per cent and 1.32 per cent, respectively. Meanwhile, energy and consumer staples led the laggards by dropping 0.93 per cent and 0.88 per cent, respectively.

Initially, markets dropped after the core consumer price index (CPI), which excludes volatile food and energy prices, rose slightly more than anticipated, dampening hopes for a half-point rate cut by the Federal Reserve.

According to CME Group's FedWatch tool, traders are now assigning an 85 per cent probability that the Fed will opt for a 25-basis-point rate cut at its Sept 17-18 meeting. Despite the core CPI uptick, the overall CPI hit its lowest annualised rate since February 2021.

"This isn't the CPI report the market wanted to see. With the core inflation coming in higher than expected, the Fed's path to a 50-basis-point rate cut has become more complicated," said Seema Shah, chief global strategist at Principal Asset Management.

Traders also responded to the first presidential debate between US Vice President Kamala Harris and former President Donald Trump on Tuesday night.

Solar stocks experienced gains, while crypto-related stocks and Bitcoin saw declines. Additionally, Trump Media & Technology, the social media stock linked to Trump, also dropped.

Technology shares helped lead a recovery from earlier significant session lows, with investors snapping up mega-cap tech and semiconductor stocks in afternoon trading. Nvidia surged 8.03 per cent on Wednesday, after the company's CEO Jensen Huang touted demand for Chips. AMD also climbed 4.9 per cent, boosting the Nasdaq.

-- BERNAMA-XINHUA