Dow ends lower as S&P 500, Nasdaq gain on AI stocks and softer CPI

• July CPI rose 0.1% monthly and 3.4% annually, matching expectations, while core inflation increased 0.2% monthly and 2.5% yearly, both easing from June
• AI infrastructure stocks led gains after CoreWeave and Super Micro Computer beat earnings expectations, with CoreWeave raising its full-year capex forecast and Super Micro projecting fiscal 2027 revenue above estimates
• Geopolitical tensions in the Middle East kept energy markets volatile, with US crude oil remaining above $83 per barrel amid uncertainty over Strait of Hormuz access and US-Iran negotiations

Market Summary: Mixed US Close on AI Rally and Softer Inflation

Market Performance

US equities closed mixed on Wednesday, August 12, 2026. The S&P 500 rose 0.26% to 7,748.50, and the Nasdaq Composite gained 0.54% to 26,588.49, while the Dow Jones slipped 0.04% to 53,770.

Inflation Data

July's Consumer Price Index showed headline inflation up 0.1% month-over-month and 3.4% annually, matching expectations. Core inflation (excluding food and energy) increased 0.2% monthly and 2.5% year-over-year, both easing slightly from June. The benign data bolstered expectations for a Federal Reserve pause in September, with CME FedWatch assigning 60-62% probability of unchanged rates.

AI Infrastructure Leads Gains

AI-related stocks drove market strength following robust earnings:

• CoreWeave surged on strong earnings and raised full-year capital expenditure guidance, signaling sustained AI infrastructure demand
• Super Micro rallied after forecasting fiscal 2027 revenue well above Wall Street expectations
• Data center operators IREN and Applied Digital advanced
• Nebius Group climbed on quarterly results exceeding estimates

Positive sentiment spread across semiconductors and AI hardware sectors, with companies like Nvidia, Micron, Dell, and Cisco participating in the rally.

Other Developments

Cava Group and other non-tech companies reported better-than-expected earnings. Geopolitical concerns persist around US-Iran tensions and Middle East shipping disruptions, keeping oil prices elevated above $83 per barrel.

Market Implications

The softer inflation data supports Fed rate pause expectations, typically beneficial for long-duration growth stocks. Continued robust AI infrastructure spending signals sustained demand, though risks include potential capex slowdowns or weakening hardware demand.