On Wednesday, Wall Street’s indexes were mixed as Alphabet fell, but moderating inflation kept hopes alive for a modest Fed rate cut.
After a report, Google’s parent dropped 3.6% as the DOJ considers breaking up the search engine.
Losses in Alphabet dragged down the Nasdaq and led the communication services sector to fall 1.3%, the biggest drop among S&P 500 sectors.
A rebound in tech stocks has helped markets recover from earlier losses due to rising U.S. unemployment data in July.
Latest data reveals that U.S. consumer prices rose moderately in July, with annual inflation slowing to below 3% for the first time since 2021.
“There is nothing in here that should prevent the Fed from proceeding with a rate cut in September,” said David Doyle, head of economics at Macquarie.
“The pace of magnitude of easing will depend broadly on incoming data with inflation and employment figures taking on particular importance.”
Money markets now estimate a 55% chance of a 25-bps cut at the Fed’s Sept. meeting, shifting from prior split views.
On Tuesday, both the S&P 500 and Nasdaq gained for the fourth session, due to softer inflation data, though still above the 2% target.
At 11:18 a.m. ET, the Dow Jones rose 0.23%, the S&P 500 gained 0.11%, while the Nasdaq fell 0.19%.
The Cboe volatility index (.VIX), Wall Street’s fear gauge, remained below its 20-point average at 16.49 for a second day.
AI stocks Nvidia, Super Micro, and Dell reversed early gains this week, while most megacap and growth stocks were mixed.
Kellanova surged 7.7% after Mars announced it will acquire the Cheez-It and Pringles maker in a $36 billion deal.
Cardinal Health gained 5.2% after raising its 2025 profit forecast, boosting investor confidence.
Intuit fell 1.9% after Morgan Stanley downgraded its rating from “overweight” to “equal-weight”.
On the NYSE, advancing issues led decliners 1.25-to-1, whereas the Nasdaq saw decliners outnumbering advancers 1.46-to-1.
The S&P 500 had 24 new highs and 2 lows, whereas the Nasdaq Composite saw 45 highs and 92 lows.
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