The S&P 500 closed near an all-time high, led by technology stocks, after a mild inflation reading eased market concerns about potential interest rate hikes. The S&P 500 rose 0.3%, while the Nasdaq 100 advanced 0.7%, reversing declines from earlier in the week. The Cboe Volatility Index (VIX) fell to its lowest level since January, signaling that investors expect short-term market stability.

Data released Wednesday showed that US consumer prices rose in line with expectations in July, with a key measure posting its slowest annual increase since March 2021. Following the CPI report and a weaker-than-expected jobs report, the market-implied probability of a Federal Reserve rate hike dropped to around 40%, down from 50% prior to the data release. "The CPI data and the disappointing employment report may give the Fed's hawkish members a reason to hold off in September," said Gary Schlossberg, global strategist at Wells Fargo Investment Institute. "However, we remain cautious on the near-term inflation outlook due to oil price volatility from the ongoing Middle East conflict and persistent core price pressures from a strong economy and the AI boom."

Strong earnings from data center bellwethers CoreWeave Inc and Nebius Group NV bolstered confidence in the artificial intelligence trade, providing additional support to the stock market. At the close, the S&P 500 was up 0.3% at 7,748.5 points. The Dow Jones Industrial Average was little changed at 53,770.27 points. The Nasdaq Composite rose 0.5% to 26,588.49 points. The Nasdaq 100 gained 0.7% to 29,742.6 points, and the Russell 2000 added 0.6% to 3,045.483 points.