Wall St. closes up; hopes for big Fed rate cut dented

STORY: U.S. stocks closed higher on Wednesday thanks to a boost from technology stocks and despite inflation data that soured investor sentiment early in the session.

The Dow added three-tenths of a percent, the S&P 500 climbed one percent and the Nasdaq gained more than two percent.

All three indexes opened down after the Labor Department reported the consumer price index ticked up in August, in line with expectations.

But core CPI, excluding volatile food and energy components, rose slightly more than expected, all but confirming a quarter-point interest rate cut from the Federal Reserve this month - and likely dashing hopes of a larger, half-point cut.

Stocks on the move included Nvidia, which added 8%. It was helped by a Semafor report that the U.S. government is considering letting Nvidia export advanced chips to Saudi Arabia.

Meanwhile, Nvidia CEO Jensen Huang spoke at a Goldman Sachs conference Wednesday, touting huge demand for the AI darling's next-generation Blackwell chip.

Melissa Otto is head of tech, media and telecom research at S&P Global Visible Alpha.

"If I look at Visible Alpha consensus data coming into Q4, Nvidia is expected to deliver $2.5 billion in revenues.

But looking ahead to next year, that number is expected to jump significantly to about $55 billion. So it'll be really interesting to see what the company guides to in Q4, and what sort of commentary they give about that outlook. 'Cause that's going to tell us a lot about the future trajectory of AI."

GameStop shares fell almost 12% after the video game retailer said it had filed for an offering of up to 20 million shares and reported lower second-quarter revenue.

The prior evening's debate between Kamala Harris and Donald Trump also played out in the market.

Stocks expected to perform well under a Trump presidency fell, including cryptocurrency and blockchain-related shares, as well as the former president's Trump Media & Technology Group, which slumped 10.5%.

Meanwhile, solar stocks, seen as benefiting from a Harris administration, rallied, with First Solar adding 15% and Sunrun up more than 11%.