The S&P 500 ended higher on Wednesday, stretching its winning streak to five sessions, as the latest inflation data reassured investors betting the Federal Reserve would start cutting U.S. interest rates next month.

The Nasdaq Composite also posted its fifth straight daily gain, although it barely scraped into positive territory as Alphabet and some megacap tech stocks weighed.

Market Snapshot

The S&P 500 closed at 5,455.21, up 0.38% or 20.78 points. The Nasdaq Composite closed at 17,192.60, up 0.03% or 4.99 points. The Dow Jones Industrial Average closed up 242.75 points or 0.61% at 40,008.39.

Market Movers

Alphabet - Shares of Alphabet, the Google-parent, dropped 2.3% on a media report that the U.S. Department of Justice is considering options that include breaking up the online search engine.

Nvidia - Nvidia stock was up 1.7% at $118.08. The stock closed 6.5% higher on Tuesday, shrugging off a report that Huawei was preparing to launch an artificial intelligence chip that rivals Nvidia ’ s for the Chinese market.

Kellanova - Kellanova stock was up 7.8%. Privately held candy company Mars has agreed toacquirethe food maker for $83.50 per share in cash in a nearly $36 billion deal.

Brinker - Brinker International shares tumbled 10.7%. The parent company of Chili ’ sreported fiscal fourth-quarteradjusted earnings of $1.61 per share, missing Wall Street ’ s call for $1.72. For fiscal 2025, it forecast adjusted earnings between $4.35 and $4.75, lower than the $4.78 analysts had penciled in.

Flutter Entertainment - Flutter Entertainment shares rose 8.1% after the online betting and gambling company beat earnings expectations,led by strong growthin its U.S. business.

Ouster - Ouster stock tumbled 27.7% after the maker of light-detection and ranging sensors said it forecasts third-quarter revenue of $27 million to $29 million, lower than the $30.2 million analysts had penciled in before the quarterly report. Economic challenges are prompting some customers to push back projects, "which   may   soften   near-term   growth," CEO Angus Pacala said on a call to discuss its earnings.

Mercury - Mercury Systems soared 17.7% after the defense company reported fourth-quarter adjusted earnings of 23 cents per share, flying past Wall Street ’ s call for a loss of 6 cents per share, according to FactSet.

Victoria's Secret - Victoria ’ s Secret jumped 16.4% after the lingerie retailer announced the appointment of Hillary Super aschief executive officereffective Sept. 9.

Peloton - Peloton Interactive stock fell 4.6% to $2.88. On Tuesday, the at-home fitness company and Google Fitbitannounceda multiyear, multicountry partnership to offer a slate of Peloton classes to Fitbit Premium users beginning in early September.

UBS - UBS shares gained 5.6%. The Swiss bankreporteda net profit of $1.1 billion, nearly double the $552.4 million consensus call among analysts tracked by FactSet.

Charles Schwab - Charles Schwab stock rose 4.6%. The company ’ s monthly activities report published on Wednesday showed that the financial-services firm brought in$29 billion in core net new assets for July, which is more than double asset-gathering levels of July 2023.

Starbucks, Chipotle Mexican Grill - Starbucks stock dipped 2.1%, while Chipotle Mexican Grill shares were flat. On Tuesday, the coffee chainsaidit had named the burrito maker ’ s chief executive officer, Brian Niccol, as its new CEO with a start date of Sept. 9.

Cardinal Health - Cardinal Health shares gained 3.7% as investors ’ anxieties about higher shipping costs evaporated in the face ofsolid earningsand strong financial forecasts.

Market News

US Annual Consumer Price Increase Slows to Below 3% as Inflation Ebbs

U.S. consumer prices rose moderately in July and the annual increase in inflation slowed to below 3% for the first time in nearly 3-1/2 years, opening the door wider for the Federal Reserve to cut interest rates next month.

The report from the Labor Department on Wednesday marked the third straight month of tame consumer price readings and added to a mild rise in producer prices last month in suggesting that inflation was firmly back on a downward trend. Ebbing inflation aligns with anecdotes from businesses that consumers are pushing back against high prices, through bargain hunting, cutting back on purchases and trading down to lower-priced substitutes.

But with rents pushing higher last month and inflation still above its 2% target, economists said it was unlikely the U.S. central bank would kick off its anticipated easing cycle with a 50-basis-point rate cut, absent a deterioration in the labor market. A jump in the unemployment rate to near a three-year high of 4.3% in July put a half-percentage-point rate reduction on the table.

Berkshire Invests in Ulta Beauty, Heico as It Retreats from Apple

Warren Buffett's Berkshire Hathaway acquired stakes in cosmetics store chain Ulta Beauty and aircraft parts maker Heico during the second quarter, when it also nearly halved its huge stake in Apple.

Berkshire owned about 690,000 Ulta Beauty shares worth $266.3 million and 1.04 million Heico shares worth $185.4 million as of June 30, according to a Wednesday regulatory filing containing its U.S.-listed holdings as of that date.