Shares of industrial and transportation companies rallied amid signs of a peak in inflation.
The Labor Department on Wednesday said the consumer-price index, a measure of what consumers pay for goods and services, rose 8.5% in July from the same month a year ago, down from a three-decade high of 9.1% in June, with particularly marked declines in the cost of gasoline, used cars and other major inflation drivers.
Economists said the report took the pressure off the Fed to continue its round of bumper rate hikes.
"The July CPI report is a welcome relief for the economy," said economists at brokerage Bank of America Securities, in a note to clients, reiterating a forecast for a slightly smaller 50-basis-point hike at the central bank's next meeting.
"The Fed's forecast of a soft landing would be greatly improved if we see continued declines in core goods - particularly durables such as new and used cars and household furnishings - and a further slowdown in shelter inflation."
One major cause of the slowdown in inflation was the fall in energy prices, a trend that continued Wednesday.
American Airlines Group expects to take its first delivery of a Boeing 787 Dreamliner as soon as Wednesday, its first after a long pause in deliveries of the jet that has created headaches for airlines and the manufacturer.
Write to Rob Curran at rob.curran@dowjones.com
(END) Dow Jones Newswires
08-10-22 1650ET
