US stocks slip 0.2% as hot inflation data, Nvidia results loom

The S&P 500 closed fractionally lower Wednesday as July inflation ran hotter than expected, with traders holding back before Nvidia's earnings after the bell.

"Inflation is annoyingly sticky right now, but not enough to move the Federal Reserve to hike," Jamie Cox, managing partner at Harris Financial Group, said.

The Dow Jones Industrial Average fell 0.2%, the Nasdaq Composite dropped 0.1%, and the S&P 500 finished fractionally lower. Industrials led the 11 S&P 500 sectors, up 1%, with C.H. Robinson Worldwide gaining more than 6% and FedEx Freight Holding rising 3.5%. The 10-year Treasury yield rose three basis points to above 4.66%, the dollar index climbed 0.3% to 99.16, and gold futures slipped nearly 1% to $4,650 an ounce.

The Personal Consumption Expenditures price index, the Fed's preferred inflation gauge, rose 3.7% year-over-year in July, matching June and ahead of the 3.6% forecast. Core PCE, which strips out food and energy, climbed 3.3%, in line with expectations. Traders now price a 36% chance the Fed raises rates at its September meeting, down from 40% a day earlier.

Nvidia, the world's most valuable company with a market cap above $5 trillion, reported after the close, with shares down 1.5% Wednesday after snapping a seven-session losing streak. The stock is up 14% this year, the best performer among the Magnificent Seven, though well off May's record highs above $236. Analysts said they would listen for updates on Nvidia's product roadmap, China sales, and rising memory prices.

In other moves, Zoom Communications sank 7% after a soft profit outlook, Intuit fell 3%, and Abercrombie & Fitch soared 36% after lifting its full-year guidance. Meta Platforms rose 1% after agreeing to pay about $18 billion to settle a social media addiction lawsuit. Crude oil was little changed, with West Texas Intermediate down 0.5% at about $82 a barrel, while bitcoin traded near $78,500.

The inflation print keeps the Fed's September decision in focus, with Chair Kevin Warsh expected to speak at the Jackson Hole Symposium on Friday. A hotter-than-expected reading could keep pressure on long-dated yields, which last week hit levels not seen since 2007, and complicate the central bank's path as it weighs whether to raise rates.

This article is for informational purposes only and does not constitute investment advice.