Traders work on the floor of the New York Stock Exchange on August 16, 2023 in New York City.
Michael M. Santiago | Getty Images
Stocks rose on Wednesday as traders weathered a higher-than-expected reading for core inflation in August.
The Dow Jones Industrial Average gained 75 points, or 0.2%. The S&P 500 rose 0.3% and the Nasdaq Composite gained 0.5%.
Tesla shares rose 1.5% after billionaire investor Ron Baron stuck to his bullish thesis on the electric vehicle maker. Other mega-cap tech stocks rose, with shares of Amazon rising 2%. Shares of Microsoft and Meta Platforms each gained more than 1%.
Core inflation in the consumer price index rose 0.3% and 4.3% in August, compared to estimates of 0.2% and 4.3%. Federal Reserve officials are focusing more on the core number because it gives a better indication of where inflation will head over the long term.
Meanwhile, headline stocks rose 0.6% last month, up 3.7% from a year ago. Economists surveyed by Dow Jones expected increases of 0.6% and 3.6%, respectively.
“This report interrupts the flow of good news [and] makes it harder to talk cheerfully about inflation,” said Vincent Reinhart, chief economist at Dreyfus and Mellon. “It doesn’t matter to the results of the upcoming FOMC meeting.” They won’t act. They have not signaled any action. Market participants do not expect any action. And that’s because they’ve slowed the pace of tightening.”
“If they act, it will be in November,” Reinhart added.
Wall Street has largely priced in a pause in interest rate hikes at next week’s Fed meeting. According to the CME FedWatch Tool, Fed Fund futures pricing data as of Wednesday morning suggests a 97% chance that interest rates will remain the same.
—CNBC’s Jeff Cox contributed to this report.
Correction: A previous version incorrectly stated the day on which Adobe reports earnings.