Stocks climbed on Wednesday, building on the strong rally from the previous session, on the back of more encouraging inflation data.

The S&P 500 advanced 0.16%, closing at 4,502.88, while the Nasdaq Composite inched higher by 0.07% and ended at 14,103.84. The Dow Jones Industrial Average added 163.51 points, or 0.47%, closing at 34,991.21.

The yield on the benchmark 10-year U.S. Treasury added 9 basis points to trade at 4.537%. The action comes a day after the rate slipped below the 4.5% threshold.

October's producer price index, which measures wholesale prices, fell by 0.5% to mark its biggest monthly drop since April 2020. Not all of the economic data was positive, however, since retail sales also declined.

"Clearly, interest rates are the key driver of this stock market, and the activity today makes sense because PPI was very, very cool, as we had expected," said Jay Hatfield, founder and CEO of Infrastructure Capital Advisors. "Today, rates are a little bit higher not because of PPI but because retail sales printed a little bit hot relative to expectations."

Wall Street is coming off a strong session in which the S&P 500 and Nasdaq had their best day since April. Those market gains came after the consumer price index remained flat for October, while a Dow Jones consensus expected a slight increase.

In corporate news, Target popped nearly 18% on better-than-expected results for the third quarter. Shares of apparel company V.F. Corp added 14% following a JPMorgan upgrade to neutral from underweight.

Wall Street also had its eyes on Washington as lawmakers sought to avoid a government shutdown. Late Tuesday, the House of Representatives passed a bill, entailing a "laddered" continuing resolution. The measure will go to the Senate for a vote. If cleared by lawmakers, the legislation goes to President Joe Biden. Without a funding bill, the federal government is slated to shut down at the end of the week.

— CNBC's Chelsey Cox contributed reporting.

Stocks finish Wednesday higher

Stocks closed higher on Wednesday, extending their gains from Tuesday's trading session.

The Dow Jones Industrial Average added nearly 164 points, or 0.47%. The S&P 500 rose 0.16%, while the Nasdaq Composite gained less than 0.1%.

— Lisa Kailai Han

U.S. crude falls 2% as inventories rise, production at record

Oil prices settled lower Wednesday amid rising U.S. inventories and record production.

U.S. crude fell $1.60, or 2.04%, to settle at $76.66 a barrel for the West Texas Intermediate December contract, while Brent crude, the global benchmark, slid $1.29, or 1.56%, to settle at $81.81 for the January contract.

Crude inventories in the U.S. rose by 3.6 million barrels last week, according to data released by the Energy Information Agency Wednesday. The U.S. continued to produce crude at a record pace, 13.2 million barrels per day. Imports fell slightly, 21,000 barrels per day, to about 6.4 million bpd.

-- Spencer Kimball

Tech sector can sustain its rally, according to AllianceBernstein

Rising usage of artificial intelligence has propelled the so-called Magnificent 7 stocks this year.

The Magnificent 7, which consists of tech titans Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla, are up 71% so far this year. In contrast, the rest of the market is up 7.5%, said AllianceBernstein analyst Sarah McCarthy — and she expects this rally to continue.

"The Magnificent 7 stocks are expected to own 18% profit share of the entire US market in 2024 and 2025, vs. 27% market cap share. Earnings growth for the Magnificent 7 is expected to be 19% in 2024 vs. 6% for the rest of the market," she wrote.

— Lisa Kailai Han, Michael Bloom

The U.S. economy can 'absolutely' avoid a recession in 2024, says Jay Hatfield

Jay Hatfield, founder and CEO of Infrastructure Capital Advisors, believes there's a good chance that the U.S. economy could get away unscathed in 2024.

"Everybody likes to obsess about student loan payments being a negative for the consumer, but we do not think we're going to have a recession next year," he told CNBC.

As catalysts, Hatfield cited a strong housing market and the drop in gasoline prices, which is very bullish for consumers. "And it's way more important than student loan payments. There's not that many consumers with student loan payments, but everyone uses energy and gasoline either directly or indirectly," he added.

— Lisa Kailai Han

GDPNow projection for fourth quarter ticks up

The U.S. economic outlook for the fourth quarter is getting slightly stronger, according to the Atlanta branch of the Federal Reserve.

The Atlanta Fed's GDPNow model projects that real gross domestic product will rise at a 2.2% rate in the fourth quarter. Last week's projection called for a 2.1% growth rate.

Projections for personal consumption and private investment also rose, according to the Atlanta Fed.

— Jesse Pound

Nu Holdings drops after third-quarter report

Shares of Brazil-based Nu Holdings were under pressure on Wednesday as investors dumped the stock despite a third-quarter report that was strong on the surface.

Nu reported $355.6 million of adjusted net income on $2.10 billion of revenue. Wall Street was expecting $294.2 million on $2.05 billion of revenue, though only a handful, according to StreetAccount, though only a handful of analysts were surveyed.

Nu added 5.4 million customers during the quarter, bringing its total to 89.1 million. Net interest income was up more than 100% year over year.

Still, the stock was down 7.5% in afternoon trading.

The curious drop for Nu's shares may be in part due to profit taking on the part of investors. Nu's stock was up more than 100% for the year before the earnings report.

Nu Holdings appears in the portfolio of many large U.S. investment funds, including Warren Buffett's Berkshire Hathaway. Daniel Sundheim's D1 Capital revealed in a filing on Tuesday that it had built a stake in Nu worth nearly $300 million during the third quarter.

—Jesse Pound

The 2024 setup for stocks is a mixed one given the earnings setup, RBC Capital Markets says

It's a mixed picture for equities next year given the earnings setup, according to Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets. While market participants are anticipating an earnings recovery, the strategist pointed out that equities have largely priced that in.

"It's hard to argue that the recovery isn't already baked in," Calvasina wrote on Wednesday. Still, she noted that investors can be optimistic heading into next year.

"While 2024 forecasts need to be adjusted in our view and this may cause some indigestion in the US equity market at certain points in time, it feels to us like a challenge the equity market can work through as opposed to something that should be cited as a reason to take a bearish view on equities for the year as a whole," Calvasina added.

— Sarah Min, Michael Bloom

Stocks making the biggest moves midday Wednesday

Check out the companies making headlines in midday trading.

Holley — Shares of the auto parts manufacturing company added 5.6% following an upgrade by Jefferies to buy from hold. The investment bank predicts Holley's sales will ramp up in the fourth quarter and thinks the stock is trading at a significant discount to historical averages. 

Target — Shares of the retailer surged 17% after Target's fiscal third-quarter earnings came in much stronger than expected. The company reported $2.10 in earnings per share on revenue of $25.4 billion. That topped the earnings of $1.48 per share and revenue of $25.24 billion projected by analysts, according to LSEG. Target's comparable sales declined for the second straight quarter, however.

V.F. Corp — The North Face and Vans parent popped 12% on the back of an upgrade to neutral from underweight by JPMorgan. The firm said the company could see a boost to profit due to cost-saving measures. The rally builds on Tuesday's gain of 10%.

CNBC Pro subscribers can check out the full list of stocks moving here.

— Hakyung Kim

Utility stocks lag

Utility stocks bucked the broader market's climb on Wednesday.

It was the worst performing sector of the S&P 500 in the session. The sector slid more than 0.3%, while the broad index rose 0.3%.

Shares of Constellation Energy weighed on the sector with a drop of more than 3%. Atmos Energy was also a contributor to the underperformance through its 1% slide.

On the other hand, Dominion Energy, the best performing stock in the sector, helped restrict losses in the session with its advance of more than 1%.

— Alex Harring

Investors were left disappointed the past 6 times they anticipated a dovish pivot from the Fed, strategist says

Tuesday's softer-than-expected consumer price index reading instilled fresh hope into the market that the Federal Reserve was finally putting an end to its rate-hiking cycle. Investors are largely anticipating a dovish pivot next year, with futures now pricing in an 87% chance of a rate cut as soon as the May 2024 FOMC meeting, said Deutsche Bank macro strategist Henry Allen.

"But this is at least the 7th time in this cycle that markets have seen a clear reaction to a potential dovish pivot," he wrote.

In the previous six occasions, investors were left disappointed. "Moreover, a consistent story of this cycle so far has been that markets have pushed out the timing of future rate cuts," Allen said.

Here are the six previous times the market anticipated a dovish pivot, that didn't come to fruition, according to Allen:

1. November 2023: "Weak data releases and a downside surprise in the CPI lead markets to bring forward the pricing of Fed cuts."
2. March 2023: "The banking turmoil following SVB's collapse led to growing anticipation that central banks had finished hiking rates altogether."
3. Late September/Early October 2022: "Major market turmoil centered on the UK leads markets to price in more rate cuts for 2023."
4. July 2022: "Global recession fears and a weak inflation print sees talk of slower rate hikes resurface."
5. May 2022: "Rising risks to global growth see investors take out expected tightening."
6. Late February/Early March 2022: "Russia's invasion of Ukraine sees the Fed commence hikes with 25bps rather than 50bps."

— Lisa Kailai Han, Michael Bloom

3 Dow stocks, 40 S&P names hit 52-week highs

Dow Jones Industrial Average components Intel, Microsoft and Walmart all hit new 52-week highs on Wednesday, with Walmart trading all-time high levels back to when it first began trading on the New York Stock Exchange in August 1972. Microsoft all traded at all-time high levels not seen since its initial public offering in March, 1986.

Meanwhile, 40 names in the S&P 500 also hit fresh 52-week highs, including Amazon, Loews and Broadcom.

Here are some other S&P companies that hit 52-week highs:

Three stocks in the Dow Jones Industrial Average hit new 52-week highs on Wednesday, while 40 names on the S&P 500 hit the milestone.

• Meta Platforms (META), trading at levels not seen since Jan, 2022
• Hilton Worldwide (HLT), trading at levels not seen since Apr, 2022
• Lululemon (LULU), trading at levels not seen since Dec. 2021
• A.O. Smith Corp (AOS), trading at levels not seen since Feb, 2022
• Copart (CPRT), trading at all-time highs back to its IPO in Mar, 1994
• Cintas (CTAS), trading at all-time high levels back to its IPO in 1983
• PACCAR (PCAR), trading at all-time high levels back to its IPO in 1971
• Parker Hannifin (PH), trading at all-time high levels back to its IPO in 1964

— Chris Hayes, Michelle Fox

Market rally has underlying strength as key technical hurdles near, Wolfe Research says

The latest rally for the stock market is quickly approaching some key resistance levels, but there are some signs that this move higher may have some staying power, according to Wolfe Research technical analyst Rob Ginsberg.

"Looking at the S&P and Nasdaq, both indices are on the cusp of overbought at longer-term resistance. Today's rally felt a bit like buying capitulation, but it was the action beneath the surface that finally got us a bit excited," Ginsberg said in a note to clients on Tuesday night.

Tuesday's rally was notable for the strong outperformance of the Russell 2000 and the wide participation among large cap stocks as well.

"We haven't seen breadth this strong since early '13, just what the anemic action beneath the surface needed. We discussed last night how the average stock (Value Line) was oversold vs. the S&P and this is exactly the type of response we wanted to see. So, while the past 11-months have seen a top-heavy market with extremely poor action internally, today's action might very well be the start of this trend reversing," the note said.

— Jesse Pound

Oil prices fall as U.S. crude inventories rise

Oil prices fell on Wednesday as the U.S. reported an increase in its commercial crude inventories.

U.S. crude fell by $1.13, or 1.44%, to $77.13 a barrel for the West Texas Intermediate December contract, while global Brent dropped by 90 cents, or 1.09%, to $81.57 for the January contract.

The drop in prices comes as U.S. commercial crude inventories rose by 3.6 million barrels last week, according to data released by the Energy Information Agency Wednesday.

U.S. imports fell by 21,000 barrels per day to average about 6.4 million bpd last week. Domestic production was unchanged week over week at 13.2 million bpd.

-- Spencer Kimball

Small-cap stocks headed for fourth-straight winning day

The Russell 2000 rose more than 1% in morning trading and is on track for its fourth straight positive day.

The small-cap index is coming off a gain of 5.44% on Tuesday, its best daily performance in more than a year.

The rebound comes at a time when small-caps have underperformed to a dramatic degree, meaning that the rally could have more room to run.

"Relatively speaking, small-caps performance over the last 12-months sits in the 1st decile historically. Overweighting small-caps is typically a bet reserved when exiting recessions, but the extremity here has our interest piqued," Strategas ETF strategist Todd Sohn said in a note to clients Tuesday.

— Jesse Pound

UBS sees the tech sector's strong rally continuing

The tech sector has led November's gains so far, with the Technology Select Sector SPDR Fund up 11% so far this month.

This rally has been fueled by the rising adoption of artificial intelligence, according to UBS analyst Sundeep Gantori.

"The question now is whether this rally will continue," he wrote in a Wednesday note. "While we acknowledge macroeconomic risks and premium valuations, global tech's likely solid 16% earnings growth in 2024 amid a strong AI spending backdrop is highly supportive."

— Lisa Kailai Han, Michael Bloom

Stocks open higher

Stocks opened higher on Wednesday after more positive inflation data extended Tuesday's gains.

The Dow Jones Industrial Average rose 109 points, or 0.3%. The S&P 500 and the Nasdaq Composite both ticked up 0.3% as well.

— Lisa Kailai Han

Wholesale prices post biggest monthly fall since April 2020

The producer price index, a measure of wholesale prices, fell by 0.5% in October, marking its largest one-month decline since April 2020. This is the second piece of data this week showing inflation pressures may be abating.

To be sure, retail sales for October fell 0.2%, underscoring the fact that consumers are still feeling the pinch from higher prices.

— Fred Imbert

CNBC Pro: Warren Buffett’s Berkshire trims holdings, keeps new stock secret

Warren Buffett's Berkshire Hathaway sold a number of stocks last quarter during the volatile market, according to a new regulatory filing. It also kept the details of one or more of its stock holdings confidential.

CNBC Pro subscribers can read the full report here.

— Yun Li, Sarah Min

Target posts big earnings beat, shares jump

Target shares were up 10% in the premarket after the retail giant posted better-than-expected third-quarter results. The company earned $2.10 per share on revenue of $25.4 billion. Analysts polled by LSEG expected a profit of $1.48 per share on revenue of $25.2 billion. CFO Michael Fiddelke said on a call with reporters that the company is "laser focused on moving both traffic and sales back into positive territory."

— Fred Imbert

Positive open for Europe

European stocks made a positive start on Wednesday.

The pan-European Stoxx 600 was up 0.4% in early trade, with basic resources adding 1.2% to lead gains as most sectors and major bourses advanced.

UK inflation falls by more than expected in October to 4.6%, lowest in two years

U.K. inflation fell sharply in October to 4.6% from 6.7% the previous month, hitting a two-year low.

The headline consumer price index was flat on a monthly basis. Economists polled by Reuters had expected the headline CPI to rise by 4.8% year-on-year and 0.1% from the previous month.

Core CPI — which excludes volatile food, energy, alcohol and tobacco prices — fell to an annual 5.7% in October from 6.1% in September.

Read the full story here.

- Elliot Smith

Siemens Energy clinches state guarantees as it posts a 4.6 billion euro annual loss

Siemens Energy has secured 7.5 billion euros ($8.15 billion) in project-related state guarantees from the German government, hours before announcing a nearly 5 billion euro loss for its fiscal year.

The German economy ministry announced late on Tuesday that it had granted the backstop as part of a wider package of 15 billion euros in guarantee lines agreed with banks and other stakeholders, following talks with private lenders and the company's largest shareholder, Siemens AG.

The company denied the fiscal guarantees constitute "state aid," with Siemens Energy CEO Christian Bruch telling CNBC on Wednesday that there is no cash involved.

The business will "pay money for these back guarantees, so it is like an insurance package," he stressed.

Read the full story here.

- Elliot Smith

Chinese EV stocks rise; Xpeng quarterly results eyed

Hong Kong-listed stocks of Chinese electric vehicle firms jumped in early afternoon trading.

Shares of BYD, Nio, Xpeng and Li Auto rose between 2.47% and 6.11%.

Markets in Asia rose across the board after upbeat economic data from China. A soft U.S. inflation reading also boosted hopes of the Federal Reserve nearing the end of its interest rate-hiking cycle.

Xpeng is set to report third-quarter results later in the day, with analysts expecting the EV firm to report revenue of 8.54 billion Chinese yuan ($1.63 billion) according to LSEG estimates. It is also expected to report a quarterly net loss of 2.90 billion Chinese yuan.

In the second quarter, the company reported a wider-than-expected loss as well as revenue of 5.06 billion Chinese yuan.

— Shreyashi Sanyal

Hong Kong stocks jump nearly 3%, lead gains in Asia markets

Hong Kong's Hang Seng index jumped 2.8% to its highest level in over one week, while the tech-focused Hang Seng Tech index surged over 3%.

The indexes gained the most among major Asia-Pacific stock markets.

Asia stocks opened higher, following upbeat sentiment overnight sparked by a soft U.S. inflation reading that boosted hopes of the Federal Reserve nearing the end of its interest rate-hiking cycle.

Also boosting sentiment, China reported better-than-expected retail sales and industrial data for October, on Wednesday.

China's CSI 300 index rose 0.77% by late morning trading.

— Shreyashi Sanyal

China industrial output, retail sales rise more than expected last month

China's industrial output and retail sales grew at a faster-than-expected pace in October, according to data from the National Bureau of Statistics.

Industrial output increased 4.6% year-on -year in October, higher than 4.5% in September and above a Reuters poll of analysts expectations of 4.4%.

Retail sales grew by 7.6% last month from a year ago, above the 7% growth forecast by a Reuters poll.

The first week of October marked the final big public holiday for the year in China, known as Golden Week. Official data showed domestic tourism spending recovered to nearly 2019 levels, but that was partly due to more people staying within the country since overseas trips had yet to fully return to pre-pandemic levels.

China's CSI 300 index was last up 0.82% in early trading.

Read the full story here.

— Shreyashi Sanyal, Evelyn Cheng

Japan's economy shrinks much faster than expected

Japan's economy shrank in the July-September period for the first time in four quarters, provisional government data showed Wednesday, amid slowing global demand and rising domestic inflation.

Provisional gross domestic product fell 2.1% in the third quarter compared to a year ago, while also recording a 0.5% decline from the previous quarter.

Economist surveyed by Reuters had expected the world's third-largest economy to post an annualized 0.6% decline and a quarter-on-quarter 0.1% contraction in the July-September quarter.

Read the full story here.

— Clement Tan

A play for income investors who want to take a little risk, per Allspring’s George Bory

An opportunity for fixed income investors has emerged in the high yield bond space, according to George Bory, chief investment strategist for fixed income at Allspring Global Investments.

"The short maturity part of the high yield market looks very attractive," he told CNBC in a phone interview Tuesday. "We call it the B's, but the higher yielding, shorter duration part of the market generates income of 7.5% and as high as 8%."

In particular, Bory has been looking at the investment grade BBB-rated issues, as well as the BB and B cohort of the high yield bond market. He aims for an average maturity between 1 ½ and 2 years.

Longer-dated bonds have greater duration, which means their prices are more sensitive to changes in interest rates. He avoids CCC-rated bonds, which carry greater default risk.

"You've isolated the bond market to the most amount of income you can generate without taking a lot of duration risk," said Bory. "This isn't a risk-free investment, but you generate 8% income ... That's one of the biggest opportunities in the market."

-Darla Mercado

Japan's economy shrinks much faster than expected

Japan's economy shrank in the July-September period for the first time in four quarters, provisional government data showed Wednesday, amid slowing global demand and rising domestic inflation.

Provisional gross domestic product fell 2.1% in the third quarter compared to a year ago, while also recording a 0.5% decline from the previous quarter.

Economist surveyed by Reuters had expected the world's third-largest economy to post an annualized 0.6% decline and a quarter-on-quarter 0.1% contraction in the July-September quarter.

Read the full story here.

— Clement Tan

SEC’s crypto enforcement reaps nearly $5 billion in financial remedies

The Securities and Exchange Commission's cryptocurrency crackdown yielded close to $5 billion in financial remedies, including penalties, for the fiscal year 2023.

The roughly $4.95 billion in remedies includes about $3.37 billion in disgorgement and prejudgment interest, plus $1.58 billion in civil penalties, according to a Tuesday announcement from the SEC.

The federal regulator said it filed 784 enforcement actions during the year, up 3% from the 2022 fiscal year.

The SEC's enforcements addressed an array of activities in the crypto space: The agency filed charges against crypto exchanges Celsius and Kraken. Regulators also slapped charges on influencers who allegedly touted crypto assets without disclosing that they were paid to do so.

-Darla Mercado

Market implications of a potential government shutdown

Washington may be able to avoid a government shutdown by the upcoming Friday deadline, but that doesn't mean Congress — or the markets — are quite in the clear. 

With several contentious issues still on the table,  such as border security and aid for Israel — economists and policy analysts on Wall Street believe the two-tier continuing resolution will just lengthen the process of reaching longer-term fiscal deals. 

"If Congress avoids a shutdown, it will likely be through yet another temporary extension. As we wrote recently, the longer the government operates under short-term extensions, the less likely it will be that Congress will reach a deal on full-year spending bills," Goldman Sachs chief economist Jan Hatzius wrote in an Oct. 25 note. 

The full story can be found here.

— Hakyung Kim

House of Representatives passes bill to avert government shutdown

The House passed a funding measure late Tuesday, sending the bill to the Senate to stave off of a government shutdown.

The bill is a "laddered" continuing resolution. That means it will fund some parts of the government until Jan. 19 and others until Feb. 2. From here, the bill goes to the Senate, which is expected to pass the bill and send it to President Joe Biden for signing.

Lawmakers voted 336 in favor of the bill, with 95 against it.

Without this funding measure in place, the federal government is set to shut down at 11:59 p.m. ET on Friday.

Read more about the continuing resolution and its details here.

-Darla Mercado, Chelsey Cox

Investors may be 'overreacting' to Tuesday's soft inflation numbers, says JPMorgan CEO Jamie Dimon

Tuesday's muted inflation numbers instilled fresh optimism into the stock market, but JPMorgan Chase CEO Jamie Dimon believes that investors may be getting ahead of themselves.

"Personally, I think people are overreacting to short-term numbers — and they should stop doing that ," he told Bloomberg. "I think inflation is probably a little stickier than that [data] shows."

Dimon added that while the Federal Reserve is pausing its rate-hiking cycle for now, that doesn't necessarily mean that there won't be any more hikes in the future.

"But I still think you should prepare that they might have to do a little more...just as a risk management tool. And I'm afraid inflation may not go away that quickly," he said.

— Lisa Kailai Han

Stock futures open higher

Stock futures were higher Tuesday after a day of notable gains from all three major indexes.

Futures tied to the Dow Jones Industrial Average added 32 points, or 0.1%. S&P futures and Nasdaq 100 futures also both ticked up 0.1%.

— Lisa Kailai Han