US stock market opens in green after CPI inflation cools down; Dow Jones and S&P 500 test record high

The US stocks opened in the green across the board after CPI inflation came in line with expectations. While the NASDAQ 100 rose 1%, the Dow Jones and S&P 500 rose by as much as 0.3% on Wednesday.

Concurrently, newly released data indicated a relatively steady core inflation rate, which alleviated pressure on the FOMC to hike interest rates. Nevertheless, lingering uncertainty surrounding the restoration of Middle Eastern energy supplies kept inflationary anxieties alive.

Meanwhile, crude oil prices remained elevated as uncertainty lingered over the outcome of diplomatic talks between the US and Iran. Brent crude oil prices hovered near $88 per barrel, and WTI crude oil prices stayed near $82.7 per barrel.

At the stock-specific level, CoreWeave Inc. shares soared near 20% after posting stronger-than-expected sales results. Similarly, SMCI advanced nearly 10% after its revenue forecast was higher than expected by analysts.

Meanwhile, chip stocks and hyperscalers also surged on Wednesday amid growing optimism around the AI ecosystem's earnings. Shares of SanDisk rose over 7%, followed by Micron Technology +5.9%, Intel Corporation +4.3%, NVIDIA +2.9%, AMD +2.7%, and Cisco +2.7% on Wednesday.

Chinese markets gained as technology stocks led the recovery. Japanese markets rose as a weakening yen fuelled expectations that the Bank of Japan might implement additional interest rate hikes as early as September to counter rising import costs and inflation risks.

Annual inflation cooled off for the second consecutive month in a row as CPI inflation for July stood at 3.4% vs 3.5% in June and in line with market expectations. Meanwhile, core inflation, which includes volatile energy and food prices, also cooled down to 2.5% in July and 2.6% in June.

The cooling inflation reduced the rate hike expectations, easing pressure on US yields. The US 10Y yields fell below 4.660% after hitting 4.735% on Tuesday. Meanwhile, gold prices surged to the $4,440 per ounce mark as investors' interest increased towards physical metals amid the continued uncertainty in the Middle East.