US stock markets advanced on Tuesday, led by a broad rally in semiconductor shares, after June inflation data came in cooler than economists had forecast.
The softer-than-expected consumer price index print has shifted market sentiment, with investors increasingly pricing in a pause in the Federal Reserve’s tightening cycle rather than an imminent rate increase.
5%, a figure that undercut consensus estimates and provided a tailwind for risk assets.
The S&P 500 rose in early trading, reflecting relief that price pressures are easing faster than anticipated.
The decline in the consumer price index for June brought the annual inflation rate down to 3.5%, a figure that undercut consensus estimates and provided a tailwind for risk assets.
The technology sector, particularly chipmakers, benefited from the improved macroeconomic backdrop, as lower inflation expectations reduce the discount rate applied to future earnings.
This development marks a continuation of the positive momentum seen in US equities, which opened higher on Tuesday following a strong close on Monday.