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Indexes up: Dow 0.82%, S&P 500 0.15%, Nasdaq 0.07%

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Traders fully price in 25 bps Fed rate cut in September

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Fed cut seen near certain after inflation data, Bessent

comments

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CoreWeave ( CRWV ) falls after larger-than-expected Q2 net loss

(Updates with early afternoon prices)

By Johann M Cherian and Sanchayaita Roy

Aug 13 (Reuters) - The benchmark S&P 500 and the Nasdaq

hovered near record highs on Wednesday as investors were

increasingly confident that the Federal Reserve could restart

its monetary policy easing cycle next month.

Signs that U.S. tariffs on imports have not fully filtered

into headline consumer prices came as a relief for investors

this week as they scour for insights on the impact trade

uncertainty has had on the economy.

Despite data showing underlying price pressures were on the

rise, markets also factored in recent weakness in the job market

and a shake-up at the Federal Reserve as they leaned in favor of

a potential dovish move by the central bank in September.

Traders are now fully pricing in a 25 basis points interest

rate cut, according to the CME's FedWatch Tool, up from 89.2%

last week. The central bank last lowered borrowing costs in

December.

Treasury Secretary Scott Bessent also said he thought an

aggressive half-point cut was possible given recent weak

employment numbers.

Stagflation "was the first word that came to my mind

when I saw this CPI report yesterday," said Mark Hackett, chief

market strategist at Nationwide, referring to Tuesday's data

coming on the heels of a number of other reports pointing to a

cooling economy.

"The slowdown that we're seeing is probably fairly

temporary, at least at this point. So inflation is something

that we're absolutely worried about because we saw that uptick."

At 12:18 p.m. ET, the Dow Jones Industrial Average

rose 363.26 points, or 0.82%, to 44,821.52, the S&P 500

gained 9.34 points, or 0.15%, to 6,455.15 and the Nasdaq

Composite advanced 15.77 points, or 0.07%, to 21,697.97.

The blue-chip Dow was within 1% away from an

all-time high and the Russell 2000 index, which tracks

rate-sensitive small-cap companies, added 0.1.3% to hit a

six-month high.

Investors were also taking notice of other sectors

following the recent tech-led rally in U.S. stocks that have

pushed valuations of the S&P 500 above long-term averages.

Healthcare stocks, which have been beaten down

for much of the year, led gains among the 11 S&P 500 sectors

with a 1.4% rise, while the tech-heavy Nasdaq 100 index

was marginally lower.

Later in the day, investors will scrutinize remarks of a

number of policymakers, especially Chicago Fed President Austan

Goolsbee.

CoreWeave ( CRWV ), which is backed by Nvidia ( NVDA ),

slumped 17.6% after the AI data center operator reported a

bigger-than-expected quarterly net loss.

Eyes are also on developments surrounding the China

revenue-sharing deal the U.S. government signed with top

chipmakers, which the White House said could be expanded to

others in the sector.

Paramount Skydance ( PSKY ) jumped 30%. The company won

exclusive broadcasting rights to the Ultimate Fighting

Championship for seven years earlier this week.

In geopolitics, traders also were keen on a meeting between

Trump and Russia's Vladimir Putin on the Ukraine conflict

scheduled on Friday.

Advancing issues outnumbered decliners by a 2.96-to-1 ratio

on the NYSE and by a 2.28-to-1 ratio on the Nasdaq.

The S&P 500 posted 37 new 52-week highs and two new

lows, while the Nasdaq Composite recorded 131 new highs and 49

new lows.