S&P 500 dips, Nasdaq higher after data shows moderate inflation rise

Key Points:

• The Nasdaq rose while the S&P 500 dipped on Wednesday, with both indexes securing their second consecutive quarterly gains, supported by softer-than-expected inflation data that lowered the likelihood of a Fed rate hike in October.
• The Personal Consumption Expenditures Price Index (PCE) increased 3.4% year-over-year in August, below economists' estimates, and second-quarter GDP growth was revised up to 2.2%, driven by consumer spending and AI infrastructure investments.
• Despite gains earlier in the session, stocks fell near the close as the 2-year US Treasury yield edged higher, reflecting lingering concerns about potential further rate hikes if inflation remains elevated.
• Private payrolls increased by 90,000 in September according to the ADP report, indicating ongoing strength in the labor market ahead of the key government jobs report due Friday.
• Technology stocks Microsoft, Apple, and Nvidia led gains, while sectors broadly declined; notable movers included Hewlett Packard Enterprise, which raised its revenue forecast, and Moderna, which was downgraded by Citigroup.