Wall Street's main indexes were on track to open higher on Wednesday as investors assessed a largely in-line inflation reading, while upbeat earnings from some AI infrastructure companies provided additional support. Labor Department data showed the consumer price index rose 3.4% in July from a year earlier, in keeping with the forecast of 3.4% from economists polled by Reuters. On a monthly basis, the CPI rose 0.1% compared with an expectation of a 0.1% increase.
Traders are now pricing in a 55% chance the U.S. Federal Reserve will hold rates at its September meeting, according to CME's FedWatch Tool. Before the data, they were split between a hike and no change. Inflation figures have been in greater focus as elevated energy prices stemming from the Middle East conflict ratcheted up the odds of a rate hike. Fed Chair Kevin Warsh's firm stance on muted forward guidance has also meant investors focus on economic data for clues about the central bank's policy direction.
These backward-looking numbers kind of put the Fed in exactly the position they want to be. They don't have to do anything. It's the narrative they want, that we're seeing some cooling, but there's no collapse in the economy," said Luke Rahbari, CEO of Equity Armor Investments.
The situation in the Middle East remained volatile as the U.S. and Yemen's Iran-aligned Houthis reported separate attacks on shipping on Tuesday as prospects for the war ending appeared to dim. At 08:52 a.m. ET, Dow E-minis rose 136 points, or 0.25%, S&P 500 E-minis gained 33 points, or 0.43%, and Nasdaq 100 E-minis advanced 279.75 points, or 0.94%.
CoreWeave (CRWV.O), opens new tab jumped 19.2% in premarket trading after the AI cloud company lifted its annual capital spending forecast and topped second-quarter earnings estimates. Other AI infrastructure providers also rose, including data-center operators IREN (IREN.O), opens new tab and Applied Digital (APLD.O), opens new tab, both up more than 8% each. Neocloud company Nebius Group (NBIS.O), opens new tab jumped 16.7%.
This earnings season, investors are discovering that not every map leads to gold.
Super Micro Computer (SMCI.O), opens new tab added 9.2% after the AI-server maker forecast fiscal 2027 revenue above Wall Street expectations.
The earnings underscore robust AI-related demand as Wall Street giants continue to spend billions to scale up AI infrastructure. Overall, current-quarter results have painted an upbeat picture of corporate America, helping lift the S&P 500 (.SPX), opens new tab and the Dow (.DJI), opens new tab to record highs. Most megacap and growth stocks rose on Wednesday, with Nvidia (NVDA.O), opens new tab up 1.6%.
