US Stock Market: DJIA, S&P500 and Nasdaq green in early trade on Tuesday

US stocks rallied sharply in the morning on Wall Street Tuesday after the government reported another decline in the pace of wholesale price inflation last month, amid hopes that inflationary pressures in the US might be easing.

The S&P 500 index rose 59.37 points or 1.5% as of 10.09 am Eastern time. The Dow Jones Industrial Average rose 274.84 points or 0.82% to 33,811.54. The Nasdaq rose 258.64 points or 2.3% to 11,454.86.

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Big technology stocks and retailers had some of the biggest gains. Apple surged 3.5%. Walmart climbed 6.9% after reporting strong financial results, raising its profit forecast, and announcing an opioid settlement.

Inflation at the wholesale level increased 8% in October from a year ago month, the fourth straight decline. Every figure of the latest inflation report came in cooler than economists expected. The data comes after a report last week on consumer prices that also showed inflation continues easing from its highest levels in four decades.

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Wall Street is closely watching inflation data that could impact how far the Federal Reserve will need to go in restraining the economy to curb inflation. The Fed has hiked its benchmark overnight rate by a big 0.75 percentage points at each of the last four meetings. That’s times the usual amount.

The latest updates on inflation have investors expecting that the Fed will hike rates by 0.50 percentage points at its meeting in December.

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The central bank has been aggressively raising interest rates to make borrowings costly and generally slow down spending to trim inflation. The strategy risk slowing economic growth too much and bringing on a recession. That fear has been hovering over Wall Street.

Bond yields, which have been hovering near the highest levels in several decades, eased slightly. The yield on the two-year Treasury slipped to 4.35% from 4.37% just before the latest inflation report. The yield on the 10-year Treasury, which helps determine mortgage rates, slipped to 3.80% from 3.83%.

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The market will get more updates on inflation’s impact on businesses and consumers this week with company earnings from big retailers. Home Depot remained stable after reporting strong financial results but maintain its sales growth forecast. Target will announce its results on Wednesday and Macy’s reports its results on Thursday.