Tech Surge Caps Quarter as Inflation Cools, Fed Rate Hikes Less Likely

U.S. stocks closed higher on Wednesday, September 30, capping a volatile month and quarter.

The Federal Reserve's preferred inflation gauge showed softer-than-expected annual inflation in August. The personal consumption expenditures price index increased 0.3% for the month, putting the 12-month gain at 3.4%, according to the Commerce Department.

Wall Street traders drove stocks higher after slower-than-anticipated inflation data reinforced bets the Federal Reserve will refrain from raising interest rates in October. The S&P 500 erased its September loss, with technology shares leading gains.

Private job creation picked up in September after a brief slowdown, with company employment rising by 90,000 for the month, up from a downwardly revised 36,000 in August and above the consensus estimate of 68,000. This provided evidence that the labor market remains stable despite economic headwinds.

Short-dated Treasury yields were little changed while those on 30-year bonds remained at the highest since 2002. The elevated long-term rates continued to weigh on some sectors even as technology stocks rallied on the inflation relief.

The S&P 500 Index gained 0.6%, with five of the 11 sectors advancing, and the benchmark is now on track to finish September with a narrow gain. Financial exchange operator Cboe Global Markets gained 4.38% following a joint announcement with S&P Dow Jones Indices regarding a 25-year extension of their exclusive licensing agreement.

Moderna fell 6.35% after Citi downgraded the biotech to Sell while raising its price target to $80 from $60. Mixed corporate news continued to create volatility within broader market gains, marking the quarter's final trading day.