S&P 500, Nasdaq advance as soft inflation tempers Fed rate-hike bets

The Nasdaq surged by more than 1 percent on Wednesday, driving gains for Wall Street's leading indexes. This positive movement was fueled by a less-than-expected inflation reading, which increased optimism that the Federal Reserve may delay its next rate hike. According to a Commerce Department report, the Personal Consumption Expenditures (PCE) price index remained at 3.4 percent on an annual basis in August, falling short of the estimated 3.7 percent.

Economists surveyed by Reuters had anticipated a higher figure. Separately, second-quarter GDP data revealed that the U.S. economy expanded at a robust pace. The PCE report was closely scrutinized as market participants sought to gauge the appropriate level of future rate increases from the Fed, explained Steve Wyett, chief investment strategist at BOK Financial.

Traders' expectations of an October hike have decreased to approximately 38 percent, down from a more than 50 percent probability a day earlier, as indicated by the CME FedWatch Tool. Barclays analysts also pointed out that recent adjustments in calculating PCE by the Bureau of Economic Analysis played a role in the lower reading.

Most major cap stocks and growth stocks experienced upward movement, with many notable companies reporting positive performance.