The Dow Jones Industrial Average dropped 443.87 points, or 0.86%, to 50,906.05, the S&P 500 shed 19.30 points, or 0.25%, to 7,651.54 ⁠and the Nasdaq Composite added 63.52 points, or 0.24%, to 26,861.06

Nasdaq climbed on Wednesday and the S&P 500 dipped, but both indexes notched their second straight quarterly gains, as a softer-than-anticipated inflation reading cooled expectations that central bank policymakers ​would hike rates in October.

The Dow Jones Industrial Average dropped 443.87 points, or 0.86%, to 50,906.05, the S&P 500 shed 19.30 points, or 0.25%, to 7,651.54 ⁠and the Nasdaq Composite added 63.52 points, or 0.24%, to 26,861.06.

The US Commerce Department reported the Personal Consumption Expenditures Price Index (PCE) increased 3.4% on an annual basis in August.

Separately, the final reading of second-quarter GDP data was revised higher to a 2.2% annualized rate.

The rising prices of crude oil from the Iran-US war and soaring diesel fuel costs have stoked inflation worries and pushed US Treasury yields higher. Central bank officials have indicated more rate hikes might be needed if price pressures fail to moderate after the bank raised interest rates ​by 25 basis points this month.

Stocks lost ground heading into the closing bell, however, as the 2-year US Treasury note yield, which typically moves in step with central bank interest-rate expectations, turned ​slightly higher on the day. Longer-dated yields kept climbing on expectations for solid economic growth.

Market expectations for a rate hike of at least 25 basis points ⁠at the bank’s October meeting plunged to around 37%, according to CME’s FedWatch Tool, from almost 51% in the prior session and around 71% a week ago.

Analysts also noted that recent methodology changes in ​calculating PCE by the Bureau of Economic Analysis contributed to a lower reading.

What the market is focused on is, is the economy continuing to grow and can it manage those higher interest ​rates? And I would say so far, the market has looked kind of like history that when the economy is growing, when profits are strong, when there’s a secular theme, it will look past higher interest rates, said Anthony Saglimbene, chief market strategist at Ameriprise Financial in Troy, Michigan.

He said: However, if these higher rates stay at these elevated levels for longer, it’s likely to start doing potentially more damage to the bond side of the portfolio, ​it could limit credit or available credit. And if investors start to feel those conditions could weigh on economic growth or weigh on corporate profitability over the next quarter or two, ​then I think you would see a very swift negative reaction in the market.