U.S. Stocks Advance as Softer Inflation Data Reduces Rate Hike Expectations

U.S. equity markets traded mostly higher on Tuesday after softer-than-expected inflation data reinforced expectations that the Federal Reserve will keep interest rates unchanged at its policy meeting later this month.

The S&P 500 edged higher, while the Nasdaq 100 gained 0.7%, supported by a rebound in technology shares. The Dow Jones Industrial Average recovered from earlier losses to trade just below the flatline.

Investor sentiment improved after both headline and core inflation measures eased, offsetting concerns stemming from another increase in oil prices as military exchanges between the United States and Iran continued.

Semiconductor stocks led the market higher following Monday’s broad selloff. Micron Technology and Sandisk each rose about 5%, tracking gains across the memory chip sector, while Nvidia added approximately 1% in afternoon trading.

Financial stocks, however, delivered mixed performance despite the start of the quarterly earnings season.

JPMorgan Chase declined 2.5% even after reporting the highest quarterly profit in its history. Bank of America fell about 1% despite reporting earnings that exceeded market expectations, while Wells Fargo lost roughly 2% following quarterly results that also surpassed forecasts.

In contrast, Goldman Sachs climbed 4% after reporting stronger-than-expected quarterly earnings.

The session reflected a shift in investor focus toward inflation and corporate earnings, with easing price pressures supporting expectations that the Federal Reserve will maintain its current policy stance while markets assess the resilience of corporate profitability against a backdrop of slowing inflation and elevated geopolitical risks.