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. 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 TAN jumping over 4%, as the prospect of a Harris administration increased optimism for renewable energy policies. First Solar Inc. FSLR was the top performer within the industry, jumping over 12%.

Elsewhere, gold remained flat, while oil prices rebounded over 2% after Tuesday’s sell-off. Bitcoin BTC/USD dropped more than 2%.

Wednesday’s Performance In Major US Indices, ETFs

Major Indices Price 1-day %chg Nasdaq 100 18,865.96 0.2% S&P 500 5,476.37 -0.3% Russell 2000 2,092.21 -0.5% Dow Jones 40,436.47 -0.7% Updated at 12:50 p.m. ET

According to Benzinga Pro data:

The SPDR S&P 500 ETF Trust SPY was 0.3% lower to $547.10.

was 0.3% lower to $547.10. The SPDR Dow Jones Industrial Average DIA fell 0.7% to $405.59.

fell 0.7% to $405.59. The tech-heavy Invesco QQQ Trust Series QQQ inched 0.2% higher to $459.93.

inched 0.2% higher to $459.93. The iShares Russell 2000 ETF IWM fell 0.4% to $207.30.

fell 0.4% to $207.30. The Technology Select Sector SPDR Fund XLK outperformed, up 0.9%. The Financials Select Sector SPDR Fund XLF was the laggard, down 1.4%.

Wednesday’s Stock Movers

Lithium-related stocks surged on Wednesday after reports of production disruptions in China sent the price of the commodity climbing. Albemarle Corp . ALB , one of the world’s largest lithium producers, rallied 9.7% on the news.

. , one of the world’s largest lithium producers, rallied 9.7% on the news. AppLovin Corporation APP surged 8.6% to $93.63 after Bank of America analyst Omar Dessouky reiterated a Buy rating and raised the price target from $100 to $120.

surged 8.6% to $93.63 after Bank of America analyst Omar Dessouky reiterated a Buy rating and raised the price target from $100 to $120. Lucid Group Inc. LCID rallied 8.1% amid bullish remarks from Bank of America analyst John Murphy, CFA who expects the Gravity SUV to get a large total addressable market.

rallied 8.1% amid bullish remarks from Bank of America analyst John Murphy, CFA who expects the Gravity SUV to get a large total addressable market. GameStop Corp. GME tanked 13.8% as revenue missed expectations last quarter.

tanked 13.8% as revenue missed expectations last quarter. Trump Media & Technology Group Corp. DJT plummeted 12.8% in reaction to the presidential debate.

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