August 13th 2026
🌍The market Story
US stocks moved higher on Wednesday after inflation data came in broadly as expected, reducing fears that the Federal Reserve may need to raise interest rates again in September. The S&P 500 gained 0.26%, while the Nasdaq rose 0.54%, helped by renewed strength in artificial intelligence companies.
The July CPI report showed inflation continuing to cool, with prices rising 0.1% during the month and annual inflation slowing to 3.4%. This gave investors more confidence that the Fed can keep rates unchanged, supporting stocks that are sensitive to borrowing costs.
At the same time, strong results from AI infrastructure companies reinforced the demand behind the technology boom. CoreWeave and Super Micro both reported strong growth expectations, showing that spending on data centres and AI computing remains strong.
However, the market still faces two key questions: whether AI investment will generate enough profits to justify the enormous spending, and whether higher oil prices could slow further progress on inflation.
📊 Market Snapshot
US Markets:
Index | Close | Daily Move |
|---|---|---|
S&P 500 | 7,748.50 | +0.26% |
Nasdaq | 26,588.49 | +0.54% |
Dow Jones | 53,770 | -0.04% |
Russell 2000 | 3,045.48 | +0.61% |
Market Takeaway: Stocks moved higher as cooling inflation and strong AI earnings provided support, while smaller companies also participated in the rally.
Key Markets:
Gold: $4,384 per ounce
Gold eased slightly after reaching a two-month high but remains supported by ongoing geopolitical uncertainty
Oil: $88 per barrel
Oil prices declined from recent highs after weaker demand forecasts and higher US inventories reduced some pressure. However, tensions around the Strait of Hormuz remain a key risk.
Bitcoin: $63,800
Bitcoin remained relatively unchanged, as investors continue to show a presence for safer more traditional assets
Dollar: The dollar softened slightly as markets became more confident that the Federal Reserve may avoid another rate increase.
🔎 Why Markets Moved
1. Inflation cooled, reducing Fed concerns
The news
July inflation data came in largely as expected, with consumer prices rising 0.1% during the month and annual inflation slowing to 3.4% from 3.5% in June.
Core inflation, which excludes food and energy prices, also continued to ease, rising 0.2% month over month and 2.5% year over year.
Why markets cared
The report reduced concerns that the Federal Reserve may need to raise interest rates again in September.
Lower rate expectations tend to support stocks because borrowing costs remain lower and future company profits become more valuable, particularly for growth companies.
However, inflation is not fully solved. Oil prices have risen since the period measured by the report, meaning investors are still watching energy prices closely.
2. AI infrastructure spending remained strong
The news
Companies tied to AI infrastructure rallied after strong results from CoreWeave and Super Micro Computer.
CoreWeave reported rapid revenue growth and a large increase in future customer commitments, while Super Micro raised its revenue outlook significantly.
Nvidia, Micron and other semiconductor companies also gained as investors continued to see strong demand for AI computing power.
Why markets cared
The results provided evidence that AI spending is translating into real demand for chips, servers and data centres.
Investors had recently become concerned that companies were spending enormous amounts on AI infrastructure without enough proof of returns.
The latest results helped ease those concerns, although the market is still focused on whether this investment will eventually generate strong profits and cash flow.
Biggest Winners 📈 & Biggest Losers 📉
Winners -
📈 CoreWeave +19%
CoreWeave surged after reporting strong demand for its AI cloud services and increasing its capital spending plans to expand data-centre capacity.
The company highlighted a $104 billion revenue backlog, showing that demand for AI computing remains extremely strong.
Why it matters:
Investors are looking for evidence that the AI boom is translating into real revenue growth. CoreWeave’s results supported the idea that demand for AI infrastructure is still accelerating.
📈Super Micro Computer +19%
Super Micro rallied after raising its fiscal 2027 revenue outlook significantly above Wall Street expectations.
The company continues to benefit from demand for AI servers and data-centre equipment.
Why it matters:
Super Micro provides a direct link between AI investment and physical infrastructure demand, showing that spending is spreading beyond just chip manufacturers.
📈 Nvidia +3%
Description
Losers -
📉 Cerebras -16%
Cerebras fell despite raising its annual targets as investors focused on whether the company’s growth outlook was already reflected in its valuation.
Why it matters:
The reaction highlights a key theme in the AI market: strong growth alone is no longer enough. Investors increasingly want proof of profitability and returns on investment.
The takeaway:
Wednesday reinforced the divide within the AI trade. Companies directly benefiting from AI infrastructure spending were rewarded, while investors punished companies that failed to exceed already extremely high expectations. The message is clear: AI demand remains strong, but the standard for success is getting higher.
⚠️ Key Risks
Oil prices remain a threat to inflation
Oil prices have eased from recent highs, but Brent remains close to $88 per barrel as uncertainty around the Strait of Hormuz continues.
A renewed rise in energy prices could slow further progress on inflation and increase pressure on the Federal Reserve to keep interest rates higher for longer.
Why it matters:
The market currently needs inflation to continue falling. A sustained oil rally could challenge the positive setup created by the latest CPI report.
Long-term interest rates remain elevated
Although expectations for a September Fed hike have fallen, the 10-year Treasury yield remains around 4.7%.
High long-term yields can pressure expensive technology companies and other rate-sensitive areas of the market.
Why it matters:
Lower short-term rate expectations are supportive for stocks, but if bond yields remain high, valuations could continue to face pressure.
👀 What To Watch Today
1. Producer inflation data
Markets will watch today's Producer Price Index (PPI) report for signs of whether inflation pressures are continuing to ease.
A softer reading would reinforce the view that the Fed can remain patient, while a hotter number could push yields higher.
2. Market breadth
The recent rally has started to broaden, with smaller companies participating alongside technology stocks.
Watch whether the Russell 2000 and equal-weight stocks continue to outperform, which would signal a healthier market advance.
3. AI stocks and infrastructure companies
After strong results from CoreWeave, Super Micro and Cisco, investors will watch whether AI-related stocks can maintain momentum.
A continued rally would suggest confidence that AI spending is translating into real earnings growth.
Bottom Line
Stocks moved higher as cooling inflation reduced Fed concerns and strong AI earnings renewed confidence in the technology trade.
The market’s focus is shifting from “Is AI demand real?” to “Can companies turn that demand into profits?”
For now, the backdrop remains supportive: strong earnings, easing inflation and broader market participation. The main risks remain oil prices and whether AI spending can deliver the returns investors are expecting.