Nasdaq Closes 0.54% Higher at 26,588.49 as Cooler Inflation Data Eases Fed Rate-Hike Fears; Dow Ends Flat 

Mumbai, Aug 13: U.S. stock markets closed mostly higher on Wednesday, with the technology-heavy Nasdaq Composite leading gains as a softer-than-expected inflation reading reinforced expectations that the Federal Reserve will hold interest rates steady at its September meeting. The S&P 500 also advanced, while the Dow Jones Industrial Average ended fractionally lower, reflecting mixed sentiment across sectors. 

The Nasdaq Composite climbed 143.04 points, or 0.54%, to settle at 26,588.49, after opening at 26,680.47. The index traded within a daily range of 26,531.93 to 26,688.24, hovering near its 52-week high of 27,190.21. Trading volume for the Nasdaq stood at 6.23 billion shares. 

The S&P 500 gained 20.30 points, or 0.26%, closing at 7,748.50, after opening at 7,765.46. The broad-market index traded between 7,737.95 and 7,766.01 during the session. 

The Dow Jones Industrial Average, however, slipped 21.58 points, or 0.04%, to end at 53,770.27, after opening at 53,797.47. The blue-chip index touched an intraday high of 53,969.36 and a low of 53,731.96. 

Dow Jones Closes Flat at 53,770.27 as Industrials and Consumer Names Weaken 

The Dow Jones Industrial Average ended the session virtually unchanged, shedding 21.58 points (-0.04%) to close at 53,770.27. The index opened at 53,797.47 and traded between a low of 53,731.96 and a high of 53,969.36. Volume on the Dow stood at 399.5 million shares. 

Despite the flat headline performance, there was notable divergence among components. Intel and Nvidia were among the top performers, rising 3.72% and 2.94% respectively, as semiconductor strength buoyed the index. Cisco Systems added 2.36%, while Caterpillar and Goldman Sachs gained 2.23% and 1.66%. Conversely, Home Depot dropped 2.67% after the company announced its CEO would take a medical leave of absence, while IBM fell 1.89% and Microsoft declined 1.48%. Boeing also slipped 1.43%. 

The mixed performance reflects ongoing rotation away from consumer discretionary and defensive names toward technology and financials, as investors parse the implications of slower inflation for corporate margins and consumer spending. 

S&P 500 Rises 0.26% to 7,748.50, Led by Tech and Real Estate Sectors 

The S&P 500 added 20.30 points (0.26%) to close at 7,748.50, after opening at 7,765.46. The index reached an intraday peak of 7,766.01 and a trough of 7,737.95. Trading volume on the S&P 500 stood at 2.64 billion shares. 

Of the 11 sectors tracked by the S&P 500, eight closed in positive territory. The Information Technology sector led the gains, rising 1.0%, driven by strength in semiconductor and AI-infrastructure names. Real Estate and Consumer Staples followed, gaining 0.95% and 0.37%, respectively. Utilities and Health Care also advanced, up 0.36% and 0.32%. 

On the downside, Consumer Discretionary was the worst performer, falling 1.09%, as concerns over consumer spending resilience weighed on retail and auto stocks. Materials dropped 0.93%, and Communication Services declined 0.77%. The divergence highlights the market’s preference for defensive and tech-oriented names amid uncertain geopolitical and inflationary conditions. 

Nasdaq Outperforms with 0.54% Gain, Closing at 26,588.49 

The Nasdaq Composite was the standout performer among the major indices, rising 143.04 points (0.54%) to finish at 26,588.49. The index opened at 26,680.47 and traded within a tight range, with a low of 26,531.93 and a high of 26,688.24. Volume for the Nasdaq was 6.23 billion shares. 

The tech-heavy index was buoyed by strong buying in semiconductor and AI-related stocks, which benefited from the favourable inflation data and sustained demand outlook. Several large-cap technology names contributed to the advance, with Nvidia rising 3.12% and Micron Technology surging 6.22%, reflecting the continued appetite for chipmakers. Broadcom added 1.09%, while Advanced Micro Devices gained 1.82%. However, some of the Magnificent Seven stocks lagged: Meta Platforms dropped 3.40%, Amazon fell 1.87%, and Microsoft declined 2.26%, indicating selective buying within the tech space. 

Also Read: How to Invest in the US Stocks From India

Secondary Indices Advance with Russell 2000 Rising 0.61% to 3,045.54 

The Russell 2000 Index, tracking small-capitalisation stocks, outperformed the major averages, climbing 18.42 points (0.61%) to close at 3,045.54. The index opened at 3,039.28 and touched a session low of 3,029.56 and a high of 3,051.02. The rally suggests broadening market participation, as investors rotate into more domestically focused companies. 

The S&P 100 Index added 4.77 points (0.13%) to finish at 3,817.24, opening at 3,832.71 and trading between 3,812.58 and 3,832.71. The index remains near its 52-week high of 3,853.02. 

The Dow Jones Composite Average rose 61.02 points (0.36%) to 16,996.03, after opening at 16,935.72 and reaching a high of 17,024.74. The Dow Jones Transportation Average surged 307.04 points (1.44%) to 21,604.65, reflecting strength in shipping and logistics stocks. The Dow Jones Utility Average added 4.02 points (0.37%) to 1,103.93, as defensive yield-plays attracted buyers. 

Philadelphia Semiconductor Index Jumps 2.49% to 12,399.38 on AI Demand Optimism 

The PHLX Semiconductor Sector Index (SOX) was a clear leader, soaring 300.90 points (2.49%) to close at 12,399.38. The index opened at 12,518.94, reached a high of 12,531.76 and a low of 12,386.31, and remains well off its 52-week high of 14,655.29. The strong performance was driven by broad-based buying across chipmakers, as investors continued to price in robust demand for semiconductors powering artificial-intelligence data centres. 

NYSE Composite Gains 0.30%; MidCap and SmallCap Indices Also Advance 

The NYSE Composite Index rose 74.96 points (0.30%) to 24,760.54, after opening at 24,685.57 and touching a session high of 24,788.06. The index remains near its 52-week high of 24,788.06. 

The S&P MidCap 400 Index gained 17.45 points (0.45%) to 3,899.84, while the S&P SmallCap 600 Index climbed 9.26 points (0.51%) to 1,812.60. The broad-based advance across market capitalisation segments indicates that positive sentiment was not confined to large-cap tech names. 

Volatility Index (VIX) Drops 2.7% to 14.87, Reflecting Easing Market Anxiety 

The CBOE Volatility Index (VIX) declined 0.41 points (-2.7%) to 14.87. The drop indicates that investors are pricing in lower near-term uncertainty following the in-line inflation data and the reduced likelihood of an immediate Fed rate hike. A VIX reading below 15 suggests a relatively complacent market environment, though geopolitical risks remain a potential source of volatility. 

July CPI Matches Expectations at 3.4%, Reinforcing September Rate-Hold Bets 

The primary catalyst for Wednesday’s market movement was the July Consumer Price Index report, which showed inflation continuing to moderate. Headline CPI rose 3.4% year-over-year in July, down from 3.5% in June and matching economists’ expectations. On a monthly basis, prices increased 0.1%, recovering from a 0.4% decline in June. 

Core CPI, which excludes volatile food and energy prices, advanced 2.5% annually, down from 2.6% in June and marking its lowest level since February. Monthly core inflation rose 0.2%, also in line with forecasts. 

Following the data release, fed funds futures trading priced in approximately a 60% probability that the Federal Reserve will keep its benchmark rate unchanged in the 3.50%-3.75% range at the September 15-16 meeting, up from roughly 45% a week earlier. This shift in expectations provided a tailwind for growth-oriented technology stocks, which are more sensitive to interest-rate movements. 

Also Read: How to Invest in S&P 500 Stocks Through Index Funds

Sector Performance: Information Technology Leads with 1.0% Gain; Consumer Discretionary Declines 1.09% 

The S&P 500 sectors showed clear divergence. The Information Technology sector rose 1.0%, benefiting from the AI-driven rally. Real Estate gained 0.95%, and Consumer Staples advanced 0.37%. Utilities rose 0.36%, Health Care added 0.32%, Industrials gained 0.25%, Financials rose 0.22%, and Energy advanced 0.21%. 

On the losing side, Consumer Discretionary fell 1.09%, dragged by weakness in retail and auto stocks. Materials dropped 0.93%, and Communication Services declined 0.77%. The performance gap highlights the market’s preference for tech and defensive names over consumer cyclicals. 

Top Gainers, Losers, and Magnificent Seven Performance 

Among the top gainers on the Nasdaq, Nebius Group surged 34% following strong quarterly results, while CoreWeave jumped 19% and Super Micro Computer climbed 19%. Lumentum Holdings gained 14%, and H&R Block rose 15% after strong results. Cava Group advanced 14% on better-than-expected comparable sales. 

On the downside, MercadoLibre fell 5.72%, AppLovin dropped 4.72%, and Meta Platforms declined 3.40%. Microsoft fell 2.26%, Amazon dropped 1.87%, and Adobe declined 1.93%. 

The Magnificent Seven delivered a mixed performance. Nvidia was the clear winner, rising 3.12% to extend its year-to-date gains. Apple declined 0.88%, Microsoft fell 2.26%, and Amazon dropped 1.87%. Alphabet (Class A) slipped 0.08%, while Meta Platforms tumbled 3.40%. Tesla declined 1.58%. The divergence suggests rotation within the tech sector, favouring semiconductor plays. 

Semiconductor Stocks Lead, While AI Infrastructure Names Surge 

Semiconductor stocks were the standout performers. Micron Technology surged 6.22%, while Western Digital gained 3.73% and Seagate Technology rose 6.69%. The Roundhill Memory ETF jumped nearly 8%, and the iShares Semiconductor ETF rose more than 2%. 

AI infrastructure stocks also rallied, with Nebius Group soaring 34% after its AI cloud revenue surged 514% year-over-year. CoreWeave jumped 19% after quarterly revenue more than doubled, and Super Micro Computer climbed 19% following strong guidance. 

July CPI Report Highlights Cooling Inflation Pressures 

The July CPI report was the key economic release of the day. Headline CPI rose 3.4% year-over-year, down from 3.5% in June. Monthly inflation was 0.1%. Core CPI, excluding food and energy, rose 2.5% annually, down from 2.6% in June, and 0.2% monthly. Both readings matched consensus estimates. 

The report follows Friday’s weaker-than-expected July jobs report, which showed the economy lost 23,000 jobs. Together, these data points reinforce the view that the Fed may not need to raise rates further, though policymakers remain cautious given elevated energy prices and geopolitical risks. 

Federal Reserve Policy Expectations Shift as Inflation Eases 

Following the inflation data, fed funds futures priced in a 60% probability of the Fed holding rates steady at 3.50%-3.75% in September. Traders see a 73% chance of a rate hike in December, per the CME FedWatch tool. 

Fed Governor Lisa Cook, who favoured holding rates steady in July, has indicated she is prepared to act if inflation does not cool, but she also noted that some disinflationary forces are already in play. The central bank remains data-dependent, with policymakers monitoring employment and inflation prints ahead of the September meeting. 

Bond Market: 10-Year Treasury Yield Holds at 4.68% as Yields Remain Flat 

U.S. Treasury yields were broadly flat. The 2-year Treasury yield held steady at 4.212%, while the 10-year yield eased by 1 basis point to 4.682%. The 30-year bond yield was unchanged at 5.231%. The yield curve remains inverted, with the 2-year below the 10-year, signalling that markets are pricing in eventual rate cuts. 

The modest decline in longer-dated yields reflects the market’s interpretation that inflation is moderating sufficiently to allow the Fed to pause. However, high energy prices and potential supply shocks keep Treasury investors cautious. 

Also Read : US Stock Market Timings

Gold Rises 0.69% to $4,471.60; Oil Prices Ease Slightly 

Gold futures for December delivery advanced $30.50 (0.69%) to $4,471.60 per ounce, trading between $4,421.40 and $4,502.70. The precious metal moved higher as the inflation data reduced the likelihood of aggressive Fed rate hikes, diminishing the opportunity cost of holding bullion. Geopolitical uncertainty also provided a safe-haven bid. 

Silver rose 0.8% to $54.20 per ounce. Copper gained 0.5% to $4.85 per pound, while Natural Gas fell 1.2% to $3.15 per million British thermal units, reflecting mild weather forecasts. 

WTI crude fell 0.3% to $83.00 per barrel, while Brent crude slipped 0.3% to $88.65. The slight pullback followed an EIA report showing a surprise build of 17.4 million barrels in commercial crude inventories, the largest weekly increase since January 2023, attributed to a slump in exports. 

Dollar Index Rises 0.2% to 100.01; Yen Weakens 

The U.S. Dollar Index (DXY) rose 0.2% to 100.01. The euro slipped 0.14% to $1.1524. The Japanese yen weakened 0.21% to 159.07 per dollar. GBP/USD traded flat at $1.2760, while USD/CNY was little changed at 7.18. 

The dollar’s modest strength reflects the interest-rate differential between the U.S. and other economies, though the move was contained as traders weighed future Japanese monetary tightening against the Fed’s steady policy stance. 

The July CPI report has effectively taken a September rate hike off the table, but the Fed remains data-dependent. Investors should monitor upcoming employment and inflation prints, as well as geopolitical developments in the Middle East, which could quickly alter the policy outlook. The 10-year Treasury yield around 4.68% and the VIX below 15 suggest a relatively stable environment, but oil prices above $80 per barrel warrant caution. Maintaining exposure to quality growth stocks with strong cash flows and defensive sectors may provide a balanced approach amid ongoing uncertainty. 

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