S&P 500 ends higher as CoreWeave results fuel AI optimism

On August 12, the S&P 500 and Nasdaq both closed higher, fueled by positive earnings from AI infrastructure companies and calm inflation data. US consumer prices barely rose in July, as gasoline costs fell for a second month in a row, and underlying inflation remained mild, reducing expectations of a Federal Reserve interest rate hike in September.

CoreWeave stock jumped 19% after the AI cloud firm raised its annual spending forecast and beat second-quarter earnings estimates. Other data center operators also rose, with IREN up nearly 10% and Applied Digital gaining 4.9%. Nebius Group surged 34% following strong second-quarter results. Super Micro Computer and chipmakers Nvidia and Micron Technology also gained, each posting double-digit gains.

The PHLX Semiconductor Index increased about 2.5%. Despite trading at a 15% discount to its June high, the S&P 500 ended the day up 0.26% at 7,748.50 points, marking a 13% gain for the year. The Nasdaq climbed 0.54% to 26,588.49 points, while the Dow Jones Industrial Average slipped 0.04%. Eight of the 11 S&P 500 sector indexes closed higher, led by real estate and information technology.

The Cboe Volatility Index fell to its lowest level since January, with traders pricing a 62% chance of the Fed maintaining rates at its September meeting. Prior to the July inflation data release, bets were split between a rate hike and no change. Tensions between the US and Iran persisted, with Iran alleging no progress in talks to revive a June interim deal and ongoing ship attacks.

Despite a relatively light trading volume of 15.5 billion shares, advancing stocks outnumbered falling ones by a 1.7-to-1 ratio, with the S&P 500 recording 19 new highs and 2 new lows, and the Nasdaq achieving 123 new highs and 95 new lows.