Stock market today: Nasdaq surges nearly 3% amid chip rally, dovish Fed comments

• US stocks jumped on Wednesday after the Fed issued dovish guidance on rates.
• Central bankers said they had more confidence inflation was back on track to 2%.
• Markets are pricing in a 100% chance of a rate cut in September, per the CME FedWatch tool.

US stocks surged on Wednesday, driven by a rally in the tech sector and dovish comments from the Federal Reserve. All three benchmark indexes ended the day in the green, with the tech-heavy Nasdaq rising nearly 3%.

Fed officials chose to keep interest rates level at the conclusion of their July policy meeting, but signaled that central bankers have already made progress in lowering inflation.

"We have stated that we do not expect it will be appropriate to reduce the target range for the federal funds rate. until we have gained greater confidence that inflation is moving sustainably toward 2%. The second quarter's inflation readings have added to our confidence, and more good data would further strengthen that confidence," Fed Chair Powell said in prepared remarks.

Markets are now pricing in with certainty that the Fed will cut rates in September, according to the CME FedWatch tool.

"The FOMC wants to see two more months of 'clean' inflation and economic data before deciding to ease off the gas," Philip Straehl, the chief investment officer at Morningstar Wealth said in a statement. "While the Fed did not cut interest rates at the July meeting, our base case is that the September cut is most likely, barring a significant reacceleration in inflation."

Chip stocks were also in the spotlight on Wednesday, after AMD reported a blockbuster quarter and Morgan Stanley named Nvidia as a top stock pick. AMD finished the day 4% higher after surging more than 10% in the morning, while Nvidia closed with a 13% daily gain.

Here's where US indexes stood at the 4 p.m. closing bell on Wednesday:

• S&P 500: 5,522.30, up 1.6%
• Dow Jones Industrial Average: 40,842.79, up 0.2% (99 points)
• Nasdaq composite: 17,599.40, up 2.6%

Here's what else happened today:

• Here's what Wall Street is expecting for Apple's third-quarter earnings report.
• Nancy Pelosi's husband just scooped up more shares of Nvidia.
• Investors should be buying up dividend-paying stocks, Bank of America said.

In commodities, bonds, and crypto:

• West Texas Intermediate crude oil surged 4.83% to $78.34 a barrel. Brent crude, the international benchmark, ticked higher 0.52% to $81.26 a barrel.
• Gold rose 1.38% to $2,446.57 per ounce.
• The 10-year Treasury yield dropped 8 basis points to 4.055%.
• Bitcoin slid 1.3% to $65,319.28.