(Reuters) – The New York Stock Exchange rallied in mid-session trading and ended in the green on Wednesday, led by technology stocks including Nvidia, after initially taking a dim view of the latest U.S. inflation data, which dampened hopes of a sharp interest rate cut by the Federal Reserve.

The televised debate ahead of the US presidential election, widely considered to have been won by Kamala Harris against former President Donald Trump, also influenced the trend with the prospect of an increase in corporate tax in the event of a victory by the Democratic candidate on November 5.

The Dow Jones index gained 0.31%, or 124.75 points, to 40,861.71 points.

The broader S&P 500 gained 58.6 points, or 1.07%, to 5,554.12.

The Nasdaq Composite rose 369.65 points (2.17%) to 17,395.53 points.

While the consumer price index rose 0.2% as expected last month in the United States, core inflation, excluding volatile items such as food and energy, was a little stronger than economists had expected, at 0.3%.

This dynamic could dissuade the Fed from lowering its key rates by 0.5 percentage points next week and encourage it to settle for a quarter-point reduction.

On the political front, Tuesday night’s presidential debate provided little insight into the economic programs of the two White House candidates, but Kamala Harris, who proposes to increase corporate taxes, was considered more impactful than Donald Trump, who is often forced into defensive postures.

These two elements contributed to a first part of the session in the red, even if the hypothesis of an election of Kamala Harris benefited solar energy specialists such as First Solar (+15.2%), Sunrun (+11.5%) or SolarEdge Technologies (+8.5%).

The rebound, however, came from technology stocks, led by Nvidia (+8.03%), a giant in chips for artificial intelligence, which, according to the specialist publication Semafor, could be authorized by the American authorities to export its products to Saudi Arabia.

The banking sector, however, suffered once again, as it did the day before, from warnings issued by several leaders of major banks on the slow recovery of investment banking activities and on the impact of expected rate cuts on net interest income. Bank of America lost 0.7%, Citigroup 1.12% and Wells Fargo 0.4%.

GameStop, meanwhile, fell 12% as the video game retailer reported a drop in quarterly revenue and the issuance of 20 million shares.

(Written by Sinéad Carew, Shashwat Chauhan and Lisa Mattackal, Bertrand Boucey)

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