by David French

NEW YORK (Reuters) – The New York Stock Exchange ended higher on Wednesday, although several major technology stocks fell and weighed on the Nasdaq, as U.S. inflation data reassured investors ahead of an interest rate cut next month.

The Dow Jones index gained 0.61%, or 242.75 points, to 40,008.39 points.

The broader S&P 500 gained 20.78 points, or 0.38%, to 5,455.21.

The Nasdaq Composite rose 4.99 points (0.03%) to 17,192.60 points.

The session was without major movements, in the middle of August and in the absence of real catalysts or elements contradicting the idea that the American Federal Reserve (Fed) will begin to reduce interest rates in September.

This was the fifth consecutive session of gains for the S&P 500 and the Nasdaq, while data published during the day indicated that consumer prices in the United States increased moderately, as expected, with an annualized increase below the 3% threshold for the first time since early 2021.

Data released on Tuesday had already provided reassurance on inflation, with a report on producer prices in the United States in line with expectations.

“There is nothing here that should prevent the Fed from cutting rates in September,” said David Doyle, chief economist at Macquarie.

“The extent of (monetary) easing will depend largely on economic data, particularly inflation and employment,” he added.

According to FedWatch Tool, financial markets are 55% betting on a 25 basis point (bps) rate cut in September, a hypothesis now favored over a 50 bps cut.

The CBOE Volatility Index, considered the gauge of fear on Wall Street, remained below its median of 20 points for the second consecutive day, after reaching a peak last week not seen since 2020 on concerns about the slowdown in the American economy.

In this regard, the US Department of Commerce’s report on retail sales, expected on Thursday, will shed new light on the economic situation.

Big technology stocks helped markets rebound earlier this month after U.S. jobs data fueled fears of a recession.

Several tech stocks fell on Wednesday, including Google parent Alphabet, which fell 2.3 percent after news reports that the U.S. Justice Department is considering measures to end what it sees as a search engine monopoly.

Tesla and Meta Platforms declined 3.1% and 0.3%, respectively, while Microsoft and Nvidia advanced.

Most major sectors of the S&P 500 ended higher, including financials.

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(Written by Jean Terzian)

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