U.S. — The S&P 500 rose 0.29% on Wednesday, following the release of cooler-than-expected June inflation data and supportive commentary from New York Federal Reserve President John Williams. The advance reflected broader gains across U.S. equity markets as investors reacted to signs that inflationary pressures may be easing.

The Nasdaq Composite outperformed, climbing 0.62%, while the Dow Jones Industrial Average also gained 0.29%. Technology stocks led the rally, with Amazon, Microsoft, and Alphabet all posting gains. In contrast, shares of chipmakers declined on the day.

The U.S. Bureau of Labor Statistics released Consumer Price Index data on Tuesday showing that the CPI rose 3.5% over the 12 months through June, down from a 4.2% annual increase in May. Core CPI, which excludes food and energy, rose 2.6% year over year in June, a decline from May’s 2.9% increase. On a monthly basis, core CPI was unchanged in June. Separately, the producer price index decreased 0.3% in June, falling short of analysts’ expectations that it would remain flat.

John Williams stated that he sees multiple signs that inflation has peaked. "There are encouraging reasons to expect that inflation has peaked and should edge down in coming quarters," he said. He expects overall inflation to decrease to around 3.25% by the end of the year and to move toward the Federal Reserve’s 2% target next year, reaching it in 2028.

"With inflation running high, it is imperative that we restore it to the Federal Reserve's 2 percent longer-run goal on a sustained basis," Williams said. He added, "The current stance of monetary policy is well positioned to do that."

Market expectations for Federal Reserve rate hikes shifted sharply following the inflation data. Before the report’s release, markets had priced in roughly a 35% chance of a quarter-point interest rate increase at the Fed’s July 28–29 meeting. Afterward, CME Group’s FedWatch indicated that traders assigned about a 10% probability to such a move.

The June inflation data marked a continued deceleration in both headline and core CPI, reinforcing investor optimism that the Fed’s tightening cycle may be nearing its end. With the producer price index also declining—contrary to expectations—businesses may face less cost pressure, potentially easing future consumer price increases. Williams’ comments, aligned with the data, suggest the central bank may maintain its current policy stance while inflation trends toward its long-term goal.