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US equity benchmarks rose after government bond yields fell and the core inflation rate grew less than expected in March, prompting some to ponder whether price increases have peaked at multi-decade highs.
The Dow Jones Industrial Average rose 0.7% to 34,544.01 after midday on Tuesday. The S&P 500 was up 0.9% to 4,454.23, and the Nasdaq Composite was 1.4% higher at 13,602.16.
The energy, consumer discretionary, and technology sectors led the gainers, with all but one peer group, healthcare, in the green.
The US 10-year yield slumped by 7.4 basis points to 2.71%, retreating from a three-year high hit in the previous trading session.
The US seasonally adjusted consumer price index rose 1.2% in March, which was in line with expectations. The gauge climbed from 0.8% in February, the Bureau of Labor Statistics said Tuesday. Gasoline prices soared more than 18% in March and accounted for more than half of all items’ monthly increases.
Core CPI, which excludes food and energy prices, advanced 0.3%, below the 0.5% market consensus and the smallest increase since September. Core CPI was up 0.5% in February.
“March CPI was likely the peak, but underlying inflation still running well above 4%,” a research note from Jefferies said on Tuesday.
The CPI surged 8.5% year on year, the biggest annual gain since 1981. The Econoday consensus was 8.4%.
The West Texas Intermediate crude oil futures jumped by $6.73 to $101.05 per barrel.
