WASHINGTON (dpa-AFX) - Stocks have moved mostly higher during trading on Tuesday, regaining ground following the weakness seen in the previous session. The tech-heavy Nasdaq has shown a notable rebound after falling sharply on Monday.
Currently, the Nasdaq is just off its high of the session, up 277.26 points or 1.1 percent at 26,150.43. The S&P 500 is also up 41.05 points or 0.6 percent at 7,556.39, while the narrower Dow is posting a more modest gain, up 88.90 points or 0.2 percent at 52,587.54.
The strength on Wall Street comes following the release of a closely watched Labor Department report showing consumer prices in the U.S. decreased by much more than expected in the month of June.
The Labor Department said its consumer price index fell by 0.4 percent in June after climbing by 0.5 percent in May. Economists had expected consumer prices to edge down by 0.1 percent.
The report also said the annual rate of consumer price growth slowed to 3.5 percent in June from 4.2 percent in May, coming in below economist estimates for a 3.8 percent jump.
Meanwhile, the Labor Department said core consumer prices, which exclude food and energy prices, came in unchanged in June after rising by 0.2 percent in May. Economists had expected core prices to increase by another 0.2 percent.
The annual rate of growth by core consumer prices slowed to 2.6 percent in June from 2.9 percent in May, while economists had expected the pace of growth to slip to 2.8 percent.
The weaker-than-expected inflation data has helped ease recent concerns about the outlook for inflation and the possibility of higher interest rates.
'Today's better than expected core reading gives the Fed breathing room in deciding whether and when to raise interest rates,' said Nationwide Chief Economist Kathy Bostjancic.
She added, 'That all said, the renewed escalation of conflict in the Middle East and announced reimposition of a U.S. blockage has prompted a sharp reversal in oil and gasoline prices that introduces upside risk to our forecast.'
However, a steep drop by shares of IBM Corp. (IBM) is limiting the upside for the Dow, with the tech giant plummeting by 25.8 percent.
The nosedive by IBM comes after the company reported preliminary second-quarter results that fell short of expectations.
Sector News
Computer hardware stocks have shown a substantial rebound after falling sharply on Monday, resulting in a 3.6 percent spike by the NYSE Arca Computer Hardware Index.
A sharp increase by gold futures has also contributed to significant strength among gold stocks, as reflected by the 3 percent surge by the NYSE Arca Gold Bugs Index.
Semiconductor, networking and banking stocks are also seeing considerable strength, while pharmaceutical and healthcare stocks have come under pressure.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan's Nikkei 225 Index climbed by 0.7 percent, while China's Shanghai Composite Index jumped by 1.4 percent.
Meanwhile, the major European markets have turned mixed over the course of the session after seeing early weakness. While the French CAC 40 Index is down by 0.2 percent, the German DAX Index is nearly unchanged and the U.K.'s FTSE 100 Index is up by 0.2 percent.
In the bond market, treasuries have moved higher following the weaker-than-expected inflation data. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3.8 basis points at 4.571 percent.
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