Stocks climbed higher on Tuesday morning after inflation data showed that consumer prices rose at a lower rate than expected in May. This inflation cooldown is expected to encourage the Federal Reserve to pause its interest rate hikes in June.
The S&P 500 advanced 0.41% on Tuesday, with the tech-heavy Nasdaq Composite Index gaining 0.71%. The Dow Jones Industrial Average edged 0.29% higher.
Data from the Bureau of Labor Statistics showed that the Consumer Price Index (CPI) showed that headline inflation rose by 4% over the previous year in May, lower than market expectations for a 4.1% year-over-year rise.
While expectations continue to rise for the Federal Reserve to pause its interest rate hikes, a Bank of America Fund Managers Survey showed that investors largely remain unconvinced that the Fed’s interest rate hikes have reached their end.
Conducted from June 2 until June 8, the survey showed that 59% of respondents believe that the central bank’s interest rate hikes are not over. This is compared to just 39% of respondents in May.