S&P 500 Stretches Winning Streak Amid Fed Rate Cut Bets

The S&P 500 extended its winning streak to five sessions on Wednesday, thanks to inflation data suggesting looming Federal Reserve interest rate cuts. Despite Alphabet and other tech giants weighing down the Nasdaq composite, key financial gains offset market stagnation. Investors remain keen on upcoming retail sales data.

The S&P 500 closed higher on Wednesday, extending its winning streak to five sessions, influenced by inflation data that bolstered investor confidence in potential Federal Reserve interest rate cuts next month. Despite this overall positive trend, the Nasdaq composite was nearly flat, impacted by declines in Alphabet and other major tech stocks.

Investor activity remained generally subdued given the August holiday season, with the latest U.S. consumer price data offering no new incentives for immediate trading moves. July's moderation in consumer prices and a slower annual inflation rate below 3% for the first time since early 2021 strengthened expectations for a September rate cut.

According to the CME FedWatch Tool, there is now a 55% likelihood of a 25-basis point rate cut at the Federal Reserve's September 17-18 meeting. This data influenced investor strategies, with Scott Ladner of Horizon Investments describing the market as 'violently going nowhere'. The S&P 500 closed at 5,455.21, up 0.38%, while the Nasdaq composite remained almost unchanged at 17,192.60, and the Dow Jones rose 0.61% to 40,008.39.

(With inputs from agencies.)