Wall Street's Rebound and Inflation Insights Drive Market Sentiment

Wall Street stocks rallied on Wednesday, reversing a prior sell-off, as inflation data solidified anticipations for a 25-basis point interest rate cut by the U.S. Federal Reserve. Investors also analyzed the U.S. Presidential debate for future policy indications. Tech stocks led the gains, boosting the Nasdaq.

Wall Street stocks surged on Wednesday, overturning earlier losses, as key inflation data reinforced expectations for a 25 basis point interest rate cut by the Federal Reserve next week.

Investors closely analyzed Tuesday night's heated U.S. Presidential debate for potential policy shifts impacting the economy. By mid-afternoon, major U.S. stock indexes reversed their earlier declines, with tech stocks, especially semiconductor companies, leading the charge and pushing the Nasdaq to outperform other indices.

The Labor Department's Consumer Price Index (CPI) showed a tempered inflation rate of 2.5%, fueling investor sentiment. However, core CPI, excluding food and energy, posted a higher-than-expected monthly increase, adding complexity to rate cut expectations. With an 87% probability, market participants now expect a 25 basis point cut at the Fed's upcoming policy meeting.

(With inputs from agencies.)