S&P 500, Nasdaq advance as soft inflation tempers Fed rate-hike bets

The Nasdaq jumped more than 1 percent on Wednesday, leading gains among Wall Street's main indexes, as a softer-than-anticipated inflation reading buoyed hopes that the Federal Reserve might not hike rates as soon as next month. A Commerce Department report showed the Personal Consumption Expenditures (PCE) price index stood at 3.4 percent on an annual basis in August against estimates of 3.7 percent, per economists polled by Reuters. Separately, second-quarter GDP data showed that the U.S. economy grew at a solid clip. "The PCE report today was under a microscope as participants try to get a handle on how aggressive the Fed needs to be with future rate increases," said Steve Wyett, chief investment strategist at BOK Financial. Traders now see a roughly 38 percent chance of an October hike, compared to a more than 50 percent chance seen one day prior, according to the CME FedWatch Tool. Barclays analysts also noted that recent methodology changes in calculating PCE by the Bureau of Economic Analysis also contributed to a lower reading. Most megacap and growth stocks ticked higher, with Am