Inflation Figures Boost Stocks, With One Big Exception

Stocks rose Tuesday after a report showed US inflation was not as bad last month as economists expected. The gains came 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 rose 28.25 points, or 0.4%, to 7,543.59.
• The Dow Jones Industrial Average rose 9.63 points, or less than 0.1%, to 52,508.27.
• The Nasdaq composite rose 233.83 points, or 0.9%, to 26,107.01.

Stocks got help from easing yields in the bond market, which fell after a report said US consumers had to pay prices for gasoline, food, and other costs of living that were 3.5% higher last month than a year earlier, the AP reports. That wasn't as bad as May's 4.2% inflation rate or the 3.9% that economists expected for June.

Lower-than-expected inflation takes some 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 of weeks. That's down from the nearly 42% probability they saw the day before, according to data from CME Group.

• Rebounds for big, influential tech stocks also helped steady the market. Micron Technology rose 4.9%, and Nvidia climbed 4.1%. A day before, they were two of the heaviest weights on the S&P 500 after falling 4.4% and 3.5%, respectively.

Big risks, however, remain for inflation. The price for a barrel of Brent crude, the international standard, briefly topped $87 in the morning. Following its leap of nearly 10% on Monday, it got back to where it was before the US and Iran signed their interim deal to halt their fighting in the middle of last month. Brent's price later pared its gain and settled at $84.73, up 1.7% from Monday. It eased after President Trump backed away from his threat made Monday to charge 20% on all cargo going through the Strait of Hormuz to reimburse the US military for its protection.

Wall Street's other big focus this week is the start of earnings reporting season, as companies tell investors how much profit they made from April through June. Bank of America, Citigroup, JPMorgan Chase, Goldman Sachs, and Wells Fargo all on Tuesday reported fatter profits for the latest quarter than analysts expected. Their reports showed strength for their trading desks and suggested spending by US consumers remains resilient. Their stocks mostly rose following the results. Goldman Sachs jumped 9%, but Citigroup fell 5.3%.

• IBM was the heaviest weight on the S&P 500 and the biggest reason the Dow lagged behind other indexes after dropping 25.2%. That was its worst day since at least 1972, according to data provider FactSet. CEO Arvind Krishna said performance for IBM's software and infrastructure businesses fell short of expectations last quarter after customers shifted their spending toward servers, storage and memory to get ahead of expected price increases caused by the AI boom.