NEW YORK (AP) — Stocks rose Tuesday after a report showed U.S. inflation was not as bad last month as economists expected. That was even though oil prices continued to climb on worries that the United States and Iran may return to all-out war.
The S&P 500 added 0.4% to recover some of its 0.8% loss from the prior day. The Dow Jones Industrial Average added 9 points, or less than 0.1%, and the Nasdaq composite climbed 0.9%.
Stocks got help from easing yields in the bond market, which fell after a report said U.S. consumers had to pay prices for gasoline, food and other costs of living that were 3.5% higher last month than a year earlier. That wasn’t as bad as May’s 4.2% inflation rate or the 3.9% that economists expected for June.
Less bad inflation takes pressure off the Federal Reserve, which is considering raising interest rates. Higher rates would keep a lid on inflation, but they also slow the economy and hurt prices for all kinds of investments.
Following the inflation report, traders see less than a 17% chance that the Fed will raise its main interest rate at its next meeting in a couple weeks. That’s down from the nearly 42% probability they saw the day before, according to data from CME Group.