Softer inflation data boosted equities as Treasury yields fell, fueling expectations of Federal Reserve rate cuts in 2024.
U.S. equities closed higher Wednesday after a volatile session, driven by softer-than-expected inflation data that reinforced bets on Federal Reserve rate cuts this year. The Nasdaq Composite led gains, rising 0.62%, while the S&P 500 and Dow Jones Industrial Average climbed 0.38% and 0.29%, respectively.
Treasury yields declined following the benign inflation report, providing support for risk assets. The market saw a sharp rotation, with AI and semiconductor stocks under pressure, while financials, large-cap tech, and consumer sectors attracted buyers. PayPal surged 17.2%, while Dell Technologies fell nearly 10%.
The session highlighted investor optimism over cooling inflation but also underscored ongoing sector shifts as traders repositioned portfolios ahead of potential Fed policy easing.