Key facts
- US stock indexes closed largely flat on Wednesday.
- The PCE price index rose 0.2% in July and 3.7% year-over-year.
- Core PCE inflation held steady at 3.3% annually.
- Investors are awaiting Nvidia's Q2 2027 earnings report.
- Meta Platforms shares rose despite a $16.7 billion settlement for a social media addiction case.
Wall Street's main indexes closed slightly lower on Wednesday, with the Dow Jones Industrial Average falling 0.21%, the S&P 500 losing 0.02%, and the Nasdaq Composite declining 0.08%. Investors reacted cautiously to a U.S. inflation reading that came in slightly above expectations, with the PCE price index rising 0.2% in July and 3.7% year-over-year. The core PCE, excluding food and energy, held steady at 3.3% annually, meeting expectations.
Markets showed a muted response to the inflation data, with odds of a September Fed rate hike falling to 38% from almost 40% a day earlier, according to the CME FedWatch Tool. Odds of a hike by year-end stayed at 73%. The focus is now shifting to Nvidia's Q2 2027 earnings report, due after the market close, with concerns about the sustainability of the AI boom if the results are not stellar. Nvidia is expected to report quarterly earnings of $2.08 a share, and revenue of approximately $91.9 billion, a 97% year-over-year increase.
In other market movements, Meta Platforms rose about 1% despite settling a social media addiction case for $16.7 billion. Goldman Sachs was a significant drag on the Dow Jones Industrial Average. Oil prices declined amid reports of potential de-escalation between Iran and Oman regarding the Strait of Hormuz. The 10-year Treasury note yield was around 4.65%.