U.S. Stocks Rally as Inflation Data Eases Rate Fears

U.S. stock indexes rallied on Wednesday after the Commerce Department reported that August inflation was 3.4%, lower than the 3.7% economists expected. The personal consumption expenditures (PCE) price index, the preferred gauge of the Federal Reserve System, showed core PCE rose 0.2% in August, bringing the annual rate to 3%. This cooler reading led traders to reduce the probability of an October interest rate hike to 35%, causing shorter-term Treasury yields to ease.

Tech stocks led the gains, with Nvidia rising after the signing of voluntary AI safety standards at the White House. Hewlett Packard Enterprise increased its networking revenue forecast, and MongoDB boosted its share buyback program by $1 billion. In the aerospace sector, The Boeing Company shares rose nearly 1% after securing a $20 billion U.S. Navy contract for next-generation fighter jets, while Northrop Grumman Corporation shares declined after losing the same contract.

Market volatility persisted in energy sectors as oil prices climbed after President Donald Trump denied reports that he would ease sanctions on Iran. Other corporate movements included a partnership between Robinhood and Cboe Global Markets, and a share drop for Cal-Maine Foods following larger-than-expected quarterly losses caused by falling egg prices. Meanwhile, the Securities and Exchange Commission is preparing rules to expand retail access to private equity and venture capital to democratize private assets.