All three major U.S. stock indexes closed higher on Wednesday with a boost from the technology sector offsetting investor disappointment at an early morning inflation report, which crushed hopes the Federal Reserve would cut interest rates by 50 basis points next week.

Market Snapshot

The Dow Jones Industrial Average rose 124.75 points, or 0.31%, to 40,861.71, the S&P 500 gained 58.61 points, or 1.07%, to 5,554.13 and the Nasdaq Composite gained 369.65 points, or 2.17%, to 17,395.53.

Market Movers

Nvidia - Nvidia shares jumped 8.2%. Nvidia CEO Jensen Huang said that his company is experiencing strong demand for its latest generation of chips, called Blackwell. Moreover, It was helped by a Semafor report that the U.S. government is considering letting Nvidia export advanced chips to Saudi Arabia.

Trump Media & Technology - Trump Media & Technology Group, the parent company of the Truth Social platform, dropped 10.5% following the first debate between former President Donald Trump and Vice President Kamala Harris.

GameStop - GameStop reported second-quarter earnings of four cents a share on sales of $798.3 million, compared with a year-earlier loss of one cent a share on sales of $1.16 billion. GameStop said cash, cash equivalents, and marketable securities were $4.2 billion at the end of the quarter, up from $1.2 billion at the end of the same period in 2023. The videogame retailer also filed for an offering of up to 20 million common shares. The stock fell 12%.

Morgan Stanley - Morgan Stanley was up 0.4% to $97.03 after being downgraded to Neutral from Buy at Goldman Sachs and having its price target cut to $105 from $122.

Bank of America - Bank of America fell 0.7%. Berkshire Hathaway has continued to pare its stake in   the bank   in recent days, selling about $229 million of shares and dropping its interest to under $34 billion, according to a regulatory filing.

Petco Health and Wellness - Second-quarter earnings at Petco Health and Wellness matched analysts ’ line expectations, while revenue of $1.52 billion slightly missed forecasts. The pet goods retailer said it expects to report a third-quarter adjusted loss of three cents to four cents a share, compared with analysts ’ estimates for a loss of four cents. Shares gained 32.9%.

It may have gotten a boost after influential meme-stock trader Roaring Kitty, aka Keith Gill, reposted a Reddit post that read "Woof is going bananas. Who ’ s here with me?"

Rentokil Initial, Rollins - U.S.-listed shares of Rentokil Initial sank 21% after the pest-control company warned it expects slower organic revenue growth in its North America operations. Fellow pest-control company   Rollins declined 2.9%.

Albemarle - Albemarle was up 13.6%. Citi analyst   Jack Shang   wrote in a report that his industry contacts suggestedContemporary Amperex Technology, the world ’ s largest maker of electric-vehicle batteries,would suspend some lithium-ore miningand halt some lithium carbonate production. Lithium is a key material in EV batteries.

First Solar, Enphase Energy, Sunrun - A group of green-energy stocks were trading higher after it was perceived that Harris bested Trump in their debate Tuesday night. First Solar gained 15.2%, Enphase Energy rose 5.7%, and Sunrun jumped 11.3%.

Market News

US Consumer Prices Rose 0.2% in August as Annual Inflation Rate Hits Lowest Since Early 2021

The CPI, a broad measure of goods and services costs across the U.S. economy, increased 0.2% in August, in line with the Dow Jones consensus.

That put the 12-month inflation rate at 2.5%, down 0.4 percentage point from the July level and the lowest since February 2021.

Traders priced in an 85% chance that the Fed will approve a quarter percentage point, or 25 basis point, interest rate reduction when its meeting concludes Sept. 18.

U.S. Considering Nvidia Chip Exports to Saudi Arabia- Report

The US government is close to allowing Nvidia to export its AI chips to Saudi Arabia, news publication Semafor reported citing unnamed sources at Saudi Arabia ’ s AI summit, Gain, held in Riyadh.

The Gain summit, running from September 10 to 12, saw representatives from AI players Alphabet, Qualcomm and Groq speak at the event.

Saudi Arabia is working close to meet the security requirements of the U.S. after shipments of Nvidia ’ s chips were limited earlier in 2024 over the country ’ s ties with China.