Stock market today: Nasdaq, S&P 500 surge as Nvidia leads bounce back from post-CPI sell-off

US stocks reversed early losses to close higher on Wednesday as investors digested an inflation report that showed consumer price increases ticked lower in August .

The benchmark S&P 500 ( ^GSPC ) rose more than 1%, while the tech-heavy Nasdaq Composite ( ^IXIC ) led the charge, rising almost than 2.2%. Meanwhile, the Dow Jones Industrial Average ( ^DJI ) popped about 0.2%, or more than 100 points. Nvidia ( NVDA ) led the rally in tech with shares soaring over 8% as CEO Jensen Huang spoke at a Goldman Sachs conference.

Investors had been looking to August's consumer price index to lift the uncertainty around the size of the Federal Reserve's first interest-rate cut in years. The data showed headline inflation slipping to a more than three-year low. But "core" prices, which strip out the more volatile costs of food and gas, climbed 0.3% over the prior month, above the 0.2% economists had expected.

After a mixed monthly jobs report, the price data was expected to help settle the debate over whether to expect a 0.5% or 0.25% easing in the Fed's policy decision next week. And after the hotter-than-expected month-over-month increase for core inflation, traders are now favoring a smaller cut from the Fed at its meeting next week.

The odds of the Fed lowering rates by 50 basis points now sit at just 15%, down from the 44% chance seen a week prior, per the CME FedWatch Tool.

Fed predictions for 2024: What experts say about the possibility of a rate cut

Meanwhile, investors were assessing Tuesday night's presidential debate between Donald Trump and Kamala Harris for insight into the nominees' plans for the economy. Their exchanges were seen as light on detail on issues that could sway markets, such as tariffs, taxes, and regulation.

Elsewhere, GameStop ( GME ) shares sank almost 12% after the video games retailer posted a quarterly revenue miss and revealed it plans to issue 20 million new shares .