Stocks rose on Tuesday after inflation data showed prices rose less than expected in May, likely heralding a pause in the Federal Reserve’s rate-hiking campaign on Wednesday.
At the close on Tuesday, the S&P 500 (^GSPC) was up about 0.7%, while the Dow Jones Industrial Average (^DJI) was up 0.4%, or about 145 points. The Nasdaq Composite (^IXIC) was up 0.8%.
The May Consumer Price Index (CPI) report showed that headline inflation rose 4% yoy in May, the slowest since April 2021 and below expectations for a 4.1% rise.
Economists expected Tuesday’s inflation reading to be broadly in line with Fed expectations and say the central bank is likely to suspend interest rates on Wednesday. According to the CME FedWatch Tool, markets are now calculating a 95% chance that the Federal Reserve will keep interest rates on hold.
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