MARKET SNAPSHOT

U.S. stocks ended higher, led by the tech sector. Treasury yields rose as inflation data reduced the likelihood of a big interest-rate cut by the Federal Reserve next week. The dollar was flat as was gold. Oil futures were higher as Hurricane Francine headed toward a Louisiana landfall.

MARKET WRAPS

EQUITIES

Stocks reversed an early decline and ended the day near session highs following a slightly hotter-than-expected reading on inflation.

The Dow Jones Industrial Average gained 0.3%, the S&P 500 rose 1.1% and the Nasdaq Composite jumped 2.2%. There were strong gains in technology shares.

A tame August inflation reading bolstered bets on a 25-basis-point rate cut from the Fed -- rather than a larger cut some had been hoping for -- sending major indexes sharply lower in early trading but later scoring a large intraday comeback.

Earlier Wednesday, Chinese shares closed mixed, weighed by bank and energy stocks.

The benchmark Shanghai Composite Index declined 0.8%, the Shenzhen Composite Index edged 0.1% lower and the ChiNext Price Index rose 1.2%. Hong Kong's Hang Seng Index was 0.7% lower, dragged by energy and consumer stocks.

Japan's Nikkei 225 closed 1.5% lower, extending its decline after the yen strengthened sharply on expectations for further rate hikes by the Bank of Japan.

Australia's S&P/ASX 200 closed 0.3% lower, weighed by a pullback in shares of the country's largest banks. The energy sector shed 1.4% amid lower oil prices, but the materials sector pared the overall losses.

New Zealand's NZX-50 closed flat as utilities ended mixed. Real-estate and aged-care stocks also finished mixed.

COMMODITIES

Oil futures finished higher after ending the previous session at their lowest since December 2021, finding support from disruptions to energy output in the Gulf of Mexico, with Hurricane Francine due to make landfall in Louisiana later in the day.

West Texas Intermediate crude for October delivery rose 2.4% to settle at $67.31 a barrel after dropping 4.3% on Tuesday. November Brent crude, the global benchmark, added nearly 2.1% to end at $70.61 a barrel.

In the Gulf, Francine strengthened to a Category 1 hurricane, with a landfall expected in southern Louisiana by Wednesday evening. The Interior Department's Bureau of Safety and Environmental Enforcement reported that 23.55% of the region's oil production and 25.56% of the area's natural-gas production had been shut in as a precaution.

Front-month September gold futures were flat at $2,512.10 an ounce as an August inflation report pared expectations around how much the Federal Reserve may cut rates next week, and following Tuesday night's debate between former President Donald Trump and Vice President Kamala Harris.

"We have a breeding ground of instability, domestically and internationally," said Jonathan Rose of Genesis Gold Group. Rose added that gold prices have further room to rise, possibly climbing to as high as $2,650 an ounce.

TODAY'S TOP HEADLINES

Inflation Extends Cooling Streak to Hit 2.5% in August

Inflation eased in August to new three-year lows, teeing up the Federal Reserve to begin gradually reducing interest rates at a meeting next week.

The consumer-price index climbed 2.5% from a year earlier, according to the Labor Department, decreasing from 2.9% in July and extending its cooling streak to five months. Core inflation, a measure that excludes volatile food and energy costs, held roughly steady at 3.2%.

Economists surveyed by The Wall Street Journal had expected overall prices to have risen 2.6% from a year ago, as well as a 3.2% increase in core prices.

Atlanta Fed's Bostic Violated Trading Rules, Office of Inspector General Says

Raphael Bostic, president of the Federal Reserve Bank of Atlanta, violated Federal Open Market Committee rules and Reserve Bank policies, according to a report released by the central bank's Office of Inspector General.

Bostic "created an 'appearance of acting on confidential FOMC information' under the FOMC blackout rule and an 'appearance of a conflict of interest' that could cause a reasonable person to question his impartiality" under the Atlanta Fed's code of conduct, the report said.

An investigation, requested by Fed Chair Jerome Powell, into Bostic's trading activities found that he breached the FOMC's blackout and trading preclearance rules, as well as the Reserve Bank's disclosure statement and prohibited holdings policies.

Mortgage rates plunge to lowest level since February 2023

The numbers: Applications for mortgages inched up as mortgage rates fell for the sixth week in a row.

The 30-year fell to the lowest level since February 2023 ahead of a highly anticipated rate cut by the Federal Reserve next week.

The drop in rates pushed the market composite index - a measure of mortgage application volume - up slightly in the past week, according to the Mortgage Bankers Association on Wednesday.

GOP Objections Force Johnson to Pull Bill Keeping Government Open

WASHINGTON-House Speaker Mike Johnson (R., La.) scrapped a planned vote to avoid a government shutdown, with opposition from rank-and-file Republican lawmakers again creating headaches for party leaders in the narrowly divided chamber.

The proposal would extend government funding for six months beyond the Sept. 30 end of the current fiscal year, to give lawmakers more time to settle on new spending levels. The bill also includes a provision that would require voters to provide proof of citizenship to register. The measure amounts to House Republicans' opening bid in what is expected to be several weeks of back-and-forth with Senate Democrats.

"No vote today," Johnson told reporters, just hours before it was scheduled to be held. He said Republican leaders would try to build support for the proposal throughout the weekend. A dozen or so GOP lawmakers are now lined up against it.

PwC Laying Off 1,800 Employees in First Formal Cuts Since 2009

PricewaterhouseCoopers's U.S. unit is laying off about 1,800 workers, its first formal layoffs since 2009, and restructuring its technology group as the firm faces slowing demand for some of its advisory business.

The Big Four accounting firm is in the process of cutting employees in the U.S. and elsewhere, primarily in its U.S. advisory and products and technology operations, according to people familiar with the matter. The cuts, about half of which are offshore, span employees ranging from associates to managing directors and include business services, audit and tax, the people said.

PwC plans to notify those affected, roughly 2.5% of the workforce at the U.S. unit, in October, the people said.