US stocks rise as traders brush off hotter-than-expected August inflation report

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US stocks rose on Wednesday even as inflation clocked in hotter than expected.
Consumer prices rose 3.7% year over year in August, above the estimated 3.6%.
Still, traders are largely expecting the Fed to hold interest rates steady at their next policy meeting.

US stocks rose Wednesday as traders digested hotter-than-expected inflation during the month of August. 

Consumer prices rose 3.7% year over year during the month of August, higher than the expected 3.6% rate and up from July’s 3.2% increase. Meanwhile, core inflation rose 4.3%, matching forecasts.

The quickening pace of inflation is largely due to rising gas prices, in addition to rising shelter prices, which increased for the 40th straight month in August, the Bureau of Labor Statistics said in a statement.

But despite hotter inflation, traders are still largely expecting the Fed to pause interest rate hikes at its next policy meeting. Markets are pricing a 97% chance the Fed will keep rates level at the 5.25%-5.5% target range, according to the CME FedWatch tool, the highest rates have been since 2001.

“As long as the economy remains resilient and inflation doesn’t re-ignite, the market can rally into year-end, once we get past the seasonally weak months of September and October,” Independent Advisor Alliance chief investment officer Chris Zaccarelli said in a statement.

Here’s where US indexes stood shortly after the 9:30 a.m. opening bell on Wednesday: 

S&P 500: 4,466.13, up, 0.09%Dow Jones Industrial Average: 34,703.43, up 0.17% (57.44 points)Nasdaq Composite: 13,791.53, up 0.13%

Here’s what else is going on today: 

The US is “playing with fire” as oil reserves drop to a 40-year-low, according to Larry McDonald.AI stocks aren’t in a bubble — the market is in the early stages of a tech cycle, Goldman Sachs said.A BRICS currency backed by gold “makes no sense whatsoever,” one market guru said.The Fed could slash interest rates by the end of the year as the US approaches a recession, according to JPMorgan Asset Management’s chief investment officer.Warren Buffet’s $123 billion fortune is closing in on the wealth of Bill Gates and Larry Ellison.

In commodities, bonds, and crypto: 

Oil continued to rise. West Texas Intermediate crude oil ticked up 0.15% to $88.91 a barrel. Brent, the international benchmark, gained 0.16% to $92.26 a barrel. Gold slipped 0.04% to $1,912.84 per ounce. The yield on the 10-year Treasury bond rose two basis points to 4.29%. Bitcoin inched higher 0.34% to $26,145. 

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