U.S. stock markets experienced a resurgence on Wednesday, following a fresh report on inflation that seems to pave the way for additional support for the economy from the Federal Reserve.

The S&P 500 index increased by 0.8%, marking the end of its two-day downward trend – the first such streak in nearly a month. This performance brought the index just short of reaching its all-time high. Notably, major technology companies propelled the Nasdaq composite to a 1.8% rise, pushing it above the 20,000 mark for the first time. Conversely, the Dow Jones Industrial Average fell by 99 points, or 0.2%.

Expectations soared as traders speculated that the inflation data reported on Wednesday would enable the Federal Reserve to implement another interest rate cut in its upcoming meeting. Current data indicates a nearly 99% chance of this occurring, a significant increase from 89% only a day prior. If achieved, this would represent the third consecutive rate cut after the Fed began reducing rates from their two-decade high back in September, with the goal of aiding a labor market that is showing signs of cooling while also striving to meet its inflation target of 2%.

While reduced rates typically stimulate growth in the economy and investment prices, there is a concern that they may also contribute to rising inflation.

According to Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management, “The data have given the Fed the ‘all clear’ for next week, and today’s inflation data keep a January cut in active discussion.”

Anticipation surrounding a series of rate cuts has been a significant driver behind the S&P 500’s impressive record of reaching all-time highs—57 times this year, most recently last week. On Wednesday, the significant gains for the index were primarily due to the performance of Nvidia and other leading tech companies, which have consistently been favorites on Wall Street. However, other sectors have begun to rally as well, indicating a potential improvement in the broader U.S. economy.

Tesla saw a notable increase of 5.9%, closing at $424.77, surpassing the $420 mark that became infamous after CEO Elon Musk tweeted about going private at that price in 2018.

Stitch Fix experienced a remarkable surge, skyrocketing 44.3% after reporting a smaller-than-expected loss for the recent quarter. Moreover, the company provided optimistic financial projections for the upcoming quarter, exceeding analysts’ expectations.

Meanwhile, GE Vernova garnered attention with a 5% increase after announcing a quarterly dividend of 25 cents and confirming a buyback plan to return up to $6 billion to its shareholders through stock repurchases.

On the downside, Dave & Buster’s Entertainment faced significant losses, plummeting 20.1% after disclosing a larger-than-anticipated loss for its latest quarter. Additionally, CEO Chris Morris has stepped down, prompting the board’s search for his permanent successor in collaboration with an executive-search firm.

Albertsons shares dropped by 1.5% following a lawsuit against Kroger, alleging insufficient efforts in securing regulatory approval for their proposed $24.6 billion merger. Albertsons is now seeking billions in damages from Kroger, whose stock rose 1% amid the litigation.

The day before, judges in both Oregon and Washington ruled against the merger, despite the grocers arguing that the merger would enhance their competitiveness against retail giants like Walmart, Costco, and Amazon. Critics contended it would harm market competition. Following the termination of the scheduled merger with Kroger, Albertsons declared plans to raise its dividend by 25% and expand its stock buyback program.

Macy’s stocks dipped 0.8% after the company adjusted its financial expectations for the entire year of 2024, including predictions about profitability per revenue dollar.

Overall, the S&P 500 rose 49.28 points to reach 6,084.19, while the Dow slipped 99.27 points to settle at 44,148.56, and the Nasdaq increased by 347.65 points, finishing at 20,034.89.

In the bond market, the yield for the 10-year Treasury saw a slight increase, rising to 4.27% from 4.23% the previous day. The yield on the two-year Treasury, which closely aligns with Fed interest rate expectations, edged up to 4.15% from 4.14%.

Globally, stock indexes predominantly rose in Europe and Asia, except for Hong Kong’s Hang Seng, which decreased by 0.8%. This decline occurred as Chinese leaders held an annual planning session in Beijing intended to outline economic policies and growth targets for the following year.

South Korea’s Kospi bounced back with a 1% rise, marking its ascent for the second consecutive day after last week’s political turmoil, during which the president briefly declared martial law.