Stocks on Wall Street turned sharply higher early Wednesday after the government reported that inflation pressures eased in May, data that investors hope could move the Federal Reserve closer to cutting its benchmark interest rate from a 23-year peak.
Futures for major U.S. indexes, which were each up a modest 0.1% before the report was released, shot up after the report was made public. Futures for the Dow Jones Industrial Average and the S&P 500 each climbed 0.7% less than an hour before markets opened.
Treasury yields fell, with the 2-year yield coming down to 4.71% from 4.83% late Tuesday and the 10-year yield declining to 4.30% from 4.40% a day earlier.
Consumer prices excluding volatile food and energy costs — the closely watched “core” index — rose 0.2% from April to May, the government said Wednesday. That’s down from 0.3% the previous month and was the smallest increase since October. Measured from a year earlier, core prices rose 3.4%, below last month’s 3.6% increase and better than the 3.5% Wall Street was expecting.
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