US stocks climb as traders hope cooler June inflation means end to Fed tightening

• US stocks climbed higher on Wednesday as traders took in good June inflation data.
• Consumer prices rose just 3% year over year, the lowest rate in two years.
• Traders are hoping cooler inflation will soon bring an end to Fed rate hikes, which have weighed on stocks.

Stocks climbed on Wednesday as traders hoped that cooling inflation will put an end to the Federal Reserve's rate hikes soon.

The June consumer price index was up 3% year over year, coming in better than Wall Street forecasts and marking the lowest rate in two years. 

Investors are still widely expecting the Fed to hike rates 25 basis points at its July policy meeting, which would lift the fed funds rate target to 5.25%-5.5%. Another rate hike remains on the table, but bets that the Fed will pause in September rose to 82% from 72% on Tuesday.

"While today's CPI data brought good news on the inflation front, we expect the FOMC to look through the fluctuations in the volatile categories, and to maintain its view that it needs to hike rates further to eventually bring inflation back to its 2% target," Barclays strategists said in a note on Wednesday, adding that the Fed would likely hike in July and again in September.

Here's where US indexes stood at the 4:00 p.m. ET close on Wednesday:

• S&P 500: 4,472.16, up 0.74%
• Dow Jones Industrial Average: 34,347.43, up 0.25% (86.01 points)
• Nasdaq Composite: 13,918.96, up 1.15%

Here's what else has happened today:

• The lowest inflation reading in two years is great news for the stock market, Fundstrat said.
• Here's where history says the latest bull market is headed next.
• Consumers will exhaust their pandemic savings by Christmas, JPMorgan CEO Jamie Dimon warned.
• If the AI productivity boom disappoints, this is where investors should put their cash, according to Bank of America.
• Here's why renters are a bigger drag on consumer spending than homeowners.

In commodities, bonds and crypto:

• West Texas Intermediate crude oil rose 1.55% to $75.99 per barrel. Brent crude, oil's international benchmark, edged up 0.29% to $80.34.
• Gold climbed 1.33% to $1,958.15 per ounce.
• The yield on the 10-year Treasury fell 11 basis points to 3.861%.
• Bitcoin slipped 0.21% to $30,464, while ether inched 0.56% higher to $1,883.