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

On Wednesday, U.S. stocks saw an upward trend as AI infrastructure companies reported positive quarterly results, particularly CoreWeave. Meanwhile, mild inflation data suggested the Federal Reserve might hold interest rates steady in September. U.S. consumer prices only saw a slight increase in July, with gasoline costs declining for the second month in a row.

This data reassured investors, reducing the expectation of a rate hike from the Federal Reserve in the coming month. The market responded positively, as it had been anticipating a potential rate increase. Senior portfolio manager Robert Pavlik noted that traders believed the Federal Reserve was not being pushed towards a hike. AI cloud company CoreWeave saw a surge after raising its annual capital spending forecast and exceeding second-quarter earnings estimates.

Data center operators also benefited, with IREN and Applied Digital both rising. Nebius Group, a data center company, jumped after reporting second-quarter results that surpassed expectations. Super Micro Computer gained after forecasting fiscal 2027 revenue above Wall Street expectations. Chipmakers experienced gains as well, with Nvidia and Micron Technology both climbing.

According to preliminary data, the S&P 500 ended the day at 7,748.58 points, up 0.26%, while the Nasdaq Composite rose to 26,588.49, up 0.55%. The Dow Jones Industrial Average fell by 0.06%. Traders are now pricing in a 62% chance of the Fed maintaining rates at its September meeting, according to CME's FedWatch Tool. The conflict between the U.S. and Iran remained volatile, with no progress reported in talks to revive the interim deal and shipping attacks continuing.

However, some stocks remained strong, such as Cava Group, which advanced after exceeding Wall Street expectations for second-quarter sales and core profit. Lumentum Holdings also surged, surpassing analysts' expectations for first-quarter revenue and beating fourth-quarter estimates.