© Reuters. Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., February 1, 2024. REUTERS/Brendan McDermid/File Photo
By Johann M Cherian and Ankika Biswas
(Reuters) – Wall Street gained some steam on Wednesday after a selloff in the prior session on a hot inflation report, while Nvidia (NASDAQ:) topped Alphabet (NASDAQ:)’s market value to become the third-most valuable U.S. company.
Nvidia overtook Google-parent Alphabet’s stock market capitalization, days before the poster child of AI boom is due to report its fourth-quarter results. Their shares were up 1.8% and 0.2%, respectively.
Other rate-sensitive megacaps Meta Platforms (NASDAQ:) and Nvidia and other chip stocks like Advanced Micro Devices (NASDAQ:) and Qualcomm (NASDAQ:) gained between 1.6% and 2.2%.
The indexes had slumped to over one-week lows on Tuesday and the blue-chip Dow posted its worst day in 11 months, as core consumer prices in January stayed at nearly double the Fed’s 2% target, forcing investors to reassess their rate cut expectations.
“What’s most disconcerting, is the pick up in inflation almost across the board, and certainly in the service side, obviously the hottest part of the economy,” said Paul Nolte, senior wealth advisor and market strategist for Murphy & Sylvest.
“I’m not ready to say that inflation is returning back to the 4%-5% level, nor am I ready to say it’s just a bump in the road heading down back down to 2%.”
Providing some relief were Chicago Fed President Austan Goolsbee’s comments that the path back to 2% inflation target would still be on track even if price increases run a bit hotter-than-expected going ahead, and the central bank should be wary of waiting too long before cutting rates.
Euphoria around an early start to monetary policy easing had fueled a Wall Street rally since November, paving the way for a bull market for the this year.
However, policymakers might have to wait a bit longer for more evidence of easing price pressures in the face of a resilient U.S. economy.
Bets for an at least 25-basis-point rate reduction in May stood at 37%, down from 63% earlier in the week, while expectations for June stood at 78.6%, the CME FedWatch tool showed.
At 9:50 a.m. ET, the was up 58.98 points, or 0.15%, at 38,331.73, the S&P 500 was up 24.26 points, or 0.49%, at 4,977.43, and the was up 93.83 points, or 0.60%, at 15,749.43.
Ten out of the 11 S&P 500 sectors advanced, led by a 1% gain in the communication services sector, while the small-caps index added 1.4%.
Lyft (NASDAQ:) surged 31.6% after the ride-hailing platform’s profit beat estimates and it said it would generate positive free cash flow for the first time in 2024.
Rival Uber (NYSE:) gained 8.8%, also boosted by a $7-billion share buyback plan.
Robinhood (NASDAQ:) Markets jumped 14.8% following a surprise fourth-quarter profit.
Crypto stocks like Coinbase (NASDAQ:), Marathon Digital (NASDAQ:) and Riot surged between 10.5% and 14.7% as bitcoin’s market value crossed $1 trillion for the first time since Nov. 21.
Advancing issues outnumbered decliners by a 5.06-to-1 ratio on the NYSE and a 3.68-to-1 ratio on the Nasdaq.
The S&P index recorded 21 new 52-week highs and two new lows, while the Nasdaq recorded 34 new highs and 24 new lows.
This story originally appeared on Investing
