Wall Street Reacts to Softer Inflation and Fed Hints in Market Rally

U.S. stock markets rose on softened inflation data and Federal Reserve policy hints, with the Dow, S&P 500, and Nasdaq climbing. Economic data fueled market momentum, despite concerns over gasoline and food prices. Upcoming Fed comments, Trump's policies, and quarterly bank reports are being closely monitored.

Wall Street's main indexes surged on Tuesday as investors welcomed a weaker-than-expected producer inflation report, which could influence the Federal Reserve's monetary strategy for the upcoming year.

A report from the Labor Department revealed only a 3.3% rise in the December 2024 producer price index on an annual basis, falling short of economist predictions of 3.4% as per Reuters polls. Despite a slight rise in the monthly index, Treasury yields eased slightly from their 14-month high.

Anticipation around big bank quarterly results, comments from Fed officials, and President-elect Trump's policy proposals are driving market sentiments as Wall Street indexes aim to recover from December's downward trend.

(With inputs from agencies.)