Update: US Equity Indexes Rise as Chipmakers Boost Technology, Cooling Inflation Lifts Bets for Fed Policy Pause

August 12, 2026 - 21:23

Wall Street finished higher on Wednesday, with the S&P 500 and the Nasdaq both posting solid gains as semiconductor stocks led a broad technology rally. Investors also grew more confident that the Federal Reserve will hold interest rates steady at its next meeting after new data showed inflation cooling more than expected.

The Dow Jones Industrial Average added about 150 points, while the S&P 500 rose roughly 0.6 percent. The tech-heavy Nasdaq outperformed, climbing nearly 1 percent. Chipmakers were the standout performers, with major names like Nvidia and Advanced Micro Devices jumping after a key industry report suggested that demand for artificial intelligence processors remains strong despite earlier concerns about a slowdown.

The latest consumer price index showed that core inflation, which excludes food and energy, rose at its slowest annual pace in over two years. That has led traders to increase bets that the Fed will pause its rate hiking campaign when policymakers meet next month. According to the CME FedWatch tool, futures now price in a better than 85 percent chance that the central bank leaves rates unchanged.

Elsewhere, energy stocks slipped as crude oil prices fell on worries about global demand. Meanwhile, geopolitical tensions in the Middle East remained in focus, but investors largely shrugged off the headlines, choosing to concentrate on the earnings season and the inflation picture. Treasury yields moved lower across the board, with the benchmark 10-year note dipping to around 4.4 percent.

The market's mood was also helped by a batch of better-than-expected corporate earnings from retailers and industrial firms. Analysts noted that while the path ahead is still uncertain, the combination of cooling price pressures and resilient consumer spending is giving the bulls a reason to stay in the game.