Tesla Inc. and Palantir Technologies Inc. declined Wednesday even as a softer July U.S. inflation report supported the broader tech market and reduced expectations for a September Federal Reserve rate increase. Headline CPI (Consumer Price Index, a key inflation measure) rose 0.1% in July, taking annual inflation to 3.4% from 3.5% in June, while core CPI, which strips out food and energy, increased 0.2% and left the annual core rate at 2.5%, its lowest since March 2021. The S&P 500 edged higher at the open and the Nasdaq gained 0.6%, but Tesla fell about 2% and Palantir dropped around 1.3%. Rate-hike expectations fell after the data, with CME FedWatch showing September hike odds at roughly 38%, down from 48.4% Tuesday, while Polymarket put the probability of a quarter-point increase at 33% after trading in the mid-40s earlier in the week. Palantir's weakness appeared tied in part to a rotation away from software and into AI infrastructure, as Microsoft Corp., Salesforce Inc., ServiceNow Inc. and Workday Inc. traded lower while semiconductor and networking shares rallied. Nebius Group N.V. jumped almost 30%, CoreWeave Inc. gained around 19% and Super Micro Computer Inc. climbed roughly 18% after earnings. Tesla, meanwhile, did not benefit from the improved rate backdrop that would typically help growth stocks. Cato Institute economist Jai Kedia had told Benzinga that a single inflation report was unlikely to cause a meaningful sustained move in those shares unless the data delivered a serious shock; his view on stock reaction held up better than his expectation that hike odds would rise. Looking ahead, some economists cautioned that the benign CPI reading may not settle the inflation debate. Peter Schiff pointed to a rebound in oil and gasoline prices later in July, while Janney Montgomery Scott chief fixed income strategist Guy LeBas said July core PCE (Personal Consumption Expenditures, the Fed's preferred inflation gauge) could come in at 0.27% month over month, with Thursday's PPI (Producer Price Index, a wholesale inflation measure) report likely to shape that estimate before the Aug. 26 PCE release.