What’s likely to move the stock market in the next trading session

US stocks reversed early losses to close higher on Wednesday as investors digested an inflation report that showed consumer price increases ticked lower in August.

The S&P 500 gained over 1%, while the tech-focused Nasdaq Composite led the way, climbing nearly 2.2%. The Dow Jones Industrial Average rose by around 0.2%, or over 100 points. Nvidia (NVDA) spearheaded the tech rally, with shares surging more than 8% following CEO Jensen Huang's presentation at a Goldman Sachs conference.

Crucial economic data is coming

1. CPI
Investors had been awaiting August’s US CPI to clarify the Federal Reserve’s upcoming interest-rate decision. The data showed headline inflation at its lowest point in over three years, though core inflation, which excludes food and gas, rose 0.3% month-over-month, higher than the expected 0.2%.

2. Jobs report
Following a mixed jobs report, the inflation data was expected to influence whether the Fed would implement a 0.5% or 0.25% rate cut next week.

3. Inflation date
With core inflation rising more than anticipated, traders are now anticipating a smaller 0.25% cut. The odds of a 50-basis-point cut dropped to 15%, down from 44% a week earlier, according to the CME FedWatch Tool.

Meanwhile, investors evaluated the presidential debate between Donald Trump and Kamala Harris, though it offered limited detail on market-relevant topics like tariffs, taxes, and regulation.

In other news, GameStop (GME) shares tumbled nearly 12% after the company missed revenue expectations and announced plans to issue 20 million new shares.

The big stock story of the day

Nvidia shares swung by about $10 from the session lows to the day’s high. The stock ended the day higher by 8%. The stock jumped as CEO Jensen Huang spoke at the Communacopia conference saying Nvidia’s key Blackwell chip is in full demand and fears of a slowdown or production problems aren’t a concern. Investors reacted to his optimism. The stock is still 17% from the June 20 high, but it’s up 136% so far in 2024. The S&P tech sector was up 3.25% on Wednesday. It is 8% from the 52-week high.

Chief Executive Jensen Huang must be getting this question a lot. He answered it on the company’s earnings call in late August, but his response wasn’t enough to sway Wall Street, as Nvidia shares NVDA headed lower after the report. Huang took another crack at the topic at a Wednesday morning Goldman Sachs event.

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