The Dow Jones Industrial Average and other stock indexes rose sharply after markets opened Wednesday, as the latest Consumer Price Index data showed inflation cooling. The CPI rose 3.3% year-over-year in May, according to data released by the Bureau of Labor Statistics, lower than the 3.4% expected increase.
With inflation slowing more than expected last month, investors are hopeful that the Federal Reserve will cut interest rates soon. The inflation report was released shortly before the Fed is expected to announce its latest interest-rate decision and economic forecasts for the year. That announcement is set for 2 p.m., with Fed Chair Jerome Powell scheduled to speak at 2:30 p.m.
According to the latest inflation data, the Consumer Price Index for All Urban Consumers (CPI-U) remained unchanged in May after increasing by 0.3% in April. And the so-called core CPI, which excludes more volatile energy and food prices, rose 3.4% last month, compared to an expected increase of 3.5% in May.
The Dow rose 300 points, or 0.8%, shortly after markets opened to trade at 39,047. The S&P 500 rose almost 0.9% to set a new record. And the Nasdaq jumped 1.1%.