Mild inflation data steadies rate expectations
Mild inflation data reinforced bets that the US Federal Reserve will hold interest rates steady in September.
US consumer prices barely increased in July as the cost of petrol declined for a second straight month. Underlying inflation was benign, further reducing expectations of an interest rate hike from the Federal Reserve next month.
"The numbers came in right in line. The market's reaction is slightly positive because the market was fearful it was going to come in worse than it did. You're seeing a market thinking that the Fed is not being pushed toward a rate hike," said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.
AI infrastructure names lead the gains
CoreWeave surged 19% after the AI cloud company lifted its annual capital spending forecast and topped second-quarter earnings estimates.
Data centre operators also rose, with IREN gaining almost 10% and Applied Digital up 4.9%.
Data centre company Nebius Group jumped 34%, helped by second-quarter results that beat expectations.
Super Micro Computer surged 19% after the AI server maker forecast fiscal 2027 revenue above Wall Street expectations.
Chip makers gained, with Nvidia rising 3.0% and Micron Technology adding 4.9%.
How the indexes finished
The S&P 500 climbed 0.26% to end the session at 7,748.50 points. The benchmark is up about 13% so far in 2026.
The Nasdaq gained 0.54% to 26,588.49 points for the session. The Dow Jones Industrial Average declined 0.04% to 53,770.27 points.
Eight of the 11 S&P 500 sector indexes rose, led by real estate, up 1.08%, followed by a 1.06% gain in information technology.
Wall Street's fear gauge - the Cboe Volatility Index - dipped 0.8 point to 14.45, its lowest level since January.
Traders are pricing in a 62% chance of the Fed holding rates at its September meeting, according to CME's FedWatch tool.
Before the July inflation data was released, bets were split between a hike and no change.
Iran talks stall as other movers rally
The conflict between the US and Iran remained volatile as a senior Iranian source said there had been no progress in talks to revive the interim deal reached in June and define a time frame to implement it. Shipping attacks continued.
