Nasdaq rallies above 20,000 for the first time as tech shares gain: Live updates

The Nasdaq Composite rose Wednesday after November’s inflation report met economists’ projections, clearing the way for the Federal Reserve to cut interest rates again at its December meeting next week.

The tech-heavy index rose 1.7% to reach 20,000 for the first time ever, while the broad market S&P 500 gained 0.9%. The Dow Jones Industrial Average rose 63 points, or 0.1%.

The broader tech space was leading the market higher, with the Technology Select Sector SPDR Fund (XLK) rising more than 1%. That puts the fund’s year-to-date gains at more than 24%. Alphabet gained for a second day on the heels of Google making a breakthrough in quantum computing with its new chip. Other tech giants like Meta and Amazon were also higher.

Nvidia, Tesla and other bull market leaders climbed following the relatively tame inflation data as well. The chipmaker ticked up about 3%, and Tesla advanced more than 3%. Those two stocks have risen about 181% and around 67%, respectively, year to date.

In-line inflation data

November’s consumer price index, which tracks a basket of goods and services, was in line with expectations. The reading showed a 0.3% rise from October and 2.7% increase from a year ago. Excluding volatile food and energy prices, core CPI increased 0.3% on the month and 3.3% on an annual basis.

While this inflation data represented a quicker pace from the prior month, traders speculated it was still not high enough to keep the Fed from cutting rates at its next gathering. Fed funds futures are pricing in a 96% likelihood that the central bank lowers rates at that gathering, according to CME’s FedWatch Tool.

“We expect a rate cut in the final meeting here at the end of the year,” Tom Hainlin, senior investment strategist at U.S. Bank Asset Management, told CNBC. “With no surprises, the direction of the market’s been higher, and there’s been nothing to derail it from melting up into year-end.”