The S&P 500 ended higher on Wednesday, stretching its winning streak to five sessions, as the latest inflation data reassured investors betting the Federal Reserve would start cutting US interest rates next month.

The Nasdaq also posted its fifth straight daily gain, although it barely scraped into positive territory as Alphabet and some megacap tech stocks weighed.

Moves were generally subdued with many investors away for August vacations, and new triggers for trading were absent, contributing to an overall listless picture among the benchmarks.

The latest US consumer price data, released earlier on Wednesday, reinforced expectations that the Fed would start interest rate cuts in September.

US consumer prices rose moderately in July, and the annual increase in inflation slowed to below 3 percent for the first time since early 2021. A day earlier, softer-than-expected producer prices data indicated inflation continued to moderate, although not yet all the way to the US central bank's 2 percent target.

Scott Ladner, chief investment officer at Horizon Investments, said he called days such as this "markets violently going nowhere", adding with CPI painting a similar picture to PPI data, there was no reason for traders to reassess moves put in place on the previous day.

"There's no huge rationale to move prices one way or another," he said.

The S&P 500 closed at 5,455, up 0.38 percent. The Nasdaq Composite closed at 17,193, up 0.03 percent. The Dow Jones Industrial Average closed up 0.61 percent at 40,008.

Shares of Alphabet, the Google-parent, dropped 2.3 percent on a media report that the US Department of Justice is considering options that include breaking up the online search engine.

Other megacaps were mixed: Tesla slumped 3.1 percent and Meta Platforms dropped 0.3 percent, while Microsoft fell 0.7 percent and Nvidia declined 1.7 percent.

A rebound in megacap and tech stocks has helped markets recoup most losses from a global market rout early this month after data showed the U.S. unemployment rate surged in July. (Reuters)