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Stocks Fall As Inflation Data Chills Rate-Cut Excitement, Chipmakers, Solar Sector Soar On Harris-Linked Boost: What’s Driving Markets Wednesday?Wall Street witnessed a broad sell-off on Wednesday, except for the tech sector, as investor optimism over disinflation progress cooled following a mixed August inflation report.The Consumer Price Index (CPI) rose 2.5% year-over-year, slightly below the 2.6% estimate and down from July’s 2.9%, marking the slowest pace of inflation since February 2021. The bulk of this decline came from energy-related categories.However, core inflation — excluding the more volatile components like food and energy — rose 0.3% month-over-month, surpassing expectations of 0.2%. The annual core CPI remained at 3.2%, reflecting persistent inflation in service-related sectors.A key driver of inflation continues to be shelter costs, which rose 0.5% from the previous month—the sharpest increase since January — and account for nearly a third of the total CPI.The report dashed hopes for a Federal Reserve rate cut in the upcoming meeting. Market expectations for a 50-basis-point cut plummeted to just 13%, down from 34% the day before, as per CME FedWatch.The inflation data gave the U.S. dollar a lift and nudged Treasury yields higher across the board. Sectors most sensitive to interest rates, such as real estate, materials and financials, led the sell-off.In contrast, tech stocks defied the broader market slump, driven by strong gains in the semiconductor space.Nvidia Corp. (NASDAQ:NVDA) surged 4.5%, buoyed by the market’s reaction to the latest U.S. presidential debate between Vice President Kamala Harris and former President Donald Trump.The two candidates engaged in a back-and-forth about tariffs on goods, which would impact inflation and the chipmaking industry.Solar stocks also rallied, with the Invesco Solar ETF (NYSE:TAN) jumping over 4%, as the prospect of a Harris administration increased optimism for renewable energy policies. First Sola …
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