Stocks bounced back Wednesday afternoon, boosted by tech shares.
Earlier, a core inflation reading came in slightly higher than expected and dashed hopes for a larger rate cut.
While the overall consumer price index came in lower than expected last month, core inflation rose 0.3% in August on a monthly basis, slightly more than predicted.
Inflation is still back to levels not seen since 2021, but that may not be enough for markets. The Federal Reserve has signaled it is ready to start cutting interest rates, but the new inflation data seems to favor a cut of 25 basis points, instead of the more aggressive half percentage point cut investors were increasingly counting on.
Meanwhile, shares in Trump Media & Technology Group slid after the first debate between presidential candidates Kamala Harris and Donald Trump. Harris was seen as performing better, which appears to have hit the stock.
For full coverage and analysis of the CPI report, click here.
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