US stocks jump as investors cheer lowest inflation reading in over 2 years

• Headline inflation eased to just 3% in June, marking the lowest inflation reading in 2 years.
• Core inflation, meanwhile, posted a year-per-year increase of 4.8% last month, below the expected 5%.
• All three indexes rose on Wednesday as investors dialed back their rate hike expectations.

US stocks jumped on Wednesday as investors cheered a positive Consumer Price Index report for June. 

Inflation clocked in at 3% on an annualized basis last month, the Bureau of Labor Statistics reported. That's slightly lower than economists' expectations of 3.1%, and the lowest reading since March 2021. 

Meanwhile, core CPI, which excludes volatile food and energy prices, rose 4.8% year-per-year, below economists' estimates of a 5% increase.

Despite the drop, traders still see a rate increase as the most likely outcome when the Federal Reserve convenes for its policy meeting at the end of this month. Markets are now pricing in an 90% chance the Fed raises rates another 25 basis-points, according to the CME FedWatch tool, slightly lower than the 92% chance on Tuesday. 

"It's unlikely the Fed will change policy or language in the short term. However, beyond the next meeting, matters are less clear and the chances of the Fed pulling of what many thought was impossible are rising; growth is robust and inflation is falling," Miton Investors chief investment officer Neil Birrell said in a statement.

Here's where US indexes stood shortly after the 9:30 a.m. ET opening bell on Wednesday:

• S&P 500: 4,476.71, up 0.84% 
• Dow Jones Industrial Average: 34,476.21, up 0.63% (214.79 points)
• Nasdaq Composite: 13,928.34, up 1.22% 

Here's what else is happening today: 

• US debt just surged by $1 trillion, a possible sign that the crisis Ray Dalio warned of is already happening.
• The AI revolution is here and will spark a 15% rally in tech stocks, according to Wedbush's Dan Ives.
• A recession is looking less likely as inflation cools and the job market stays resilient, according to top economist Paul Krugman.

In commodities, bonds, and crypto: 

• Oil prices were up. West Texas Intermediate crude climbed 1.1% to $75.66 a barrel. Brent, the international benchmark, rose 0.8% to $80.08 a barrel. 
• Gold edged rose 1% to $1,956.70 an ounce. 
• The 10-year Treasury yield dipped six basis points to 3.913%.
• Bitcoin inched rose 1.2% to $30,793.71.