The United States (US) consumer price index (CPI) data was released on Wednesday yesterday, reinforcing expectations that the Federal Reserve (Fed) will start cutting interest rates in September.
US CPI rose modestly in July, and the annual rise in inflation slowed below the 3% mark for the first time since early 2021.
A day earlier, 'softer' than expected producer inflation data showed inflation continued to moderate, although not all towards the U.S. central bank's 2% target.
Currency markets now see a 55% chance of a 25 basis point (bps) rate cut at the September 17-18 Fed meeting, according to the CME FedWatch indicator. Before the data, investor expectations were roughly equal between a 25-bps and 50-bps cut.
Trading on Wednesday saw the Dow and S&P 500 rise 0.61% and 0.38%, while the Nasdaq Composite rose 0.03%.
Seven of the 11 S&P sectors ended higher, led by financials, energy and technology.
The gains came as the latest CPI report confirmed that US inflation moderated to more normal levels, giving the Fed room to cut rates soon.
Investors now await US retail sales data later today (Thursday) for further guidance.
In extended trading, Cisco Systems jumped more than 5% on better-than-expected quarterly results.
Ulta Beauty also jumped 14% after Warren Buffett's Berkshire Hathaway bought a stake in the cosmetics company.
Nike jumped 3.4% after Pershing Square's Bill Ackman revealed an investment in the shoe giant.
