Wall Street climbed Tuesday as fresh inflation data reinforced investor hopes for Federal Reserve rate cuts later this year. The S&P 500 gained 1.2% to close at 6,485, while the Nasdaq outperformed with a 1.6% advance to 18,950. The Dow industrials rose 0.9% to 45,680.
Tech stocks led the charge, with artificial intelligence darling Nvidia surging 4.3% on optimistic commentary about data center spending from major cloud providers. The semiconductor sector broadly rallied as investors bet on continued AI infrastructure buildout. Growth names found renewed favor as the 10-year Treasury yield dipped below 4.2%.
Energy was the day's laggard, with Exxon Mobil declining 2.8% as crude oil prices retreated on demand concerns. The VIX fear gauge fell to 16.8, reflecting reduced market anxiety. Gold held steady near $2,385 as investors weighed inflation trends against dollar strength.
The rally came as core CPI data showed encouraging signs of disinflation, though prices remain elevated. Investors are increasingly confident the Fed will begin cutting rates by mid-year, boosting appetite for duration risk in growth stocks.