US stocks close with gains as easing inflation calms Fed fears

By Ovunc Kutlu

ISTANBUL (AA) - US stocks closed with gains on Tuesday as easing consumer inflation figures calmed investors' fears about the Federal Reserve's next interest rate decision.

Annual consumer inflation slowed to its lowest pace in more than two years, coming in at 4% in May -- the smallest 12-month increase since March 2021 -- and significantly easing from 4.9% in April.

On a monthly basis, consumer prices rose just 0.1% in May from the previous month, slowing pace from April's gain of 0.4%.

After increasing interest rates by a total of 500 basis points since March 2022 in 10 meetings to lower record-high inflation, the Fed is widely expected to put a break on rate hikes at the conclusion of its two-day meeting Wednesday.

The probability of the Fed keeping rates unchanged was at 90.8% at 4.30 p.m. EDT, according to the FedWatch Tool provided by the US-based global markets company the Chicago Mercantile Exchange Group.

With investors' optimism, the blue-chip Dow Jones added 145 points, or 0.43%, to close Tuesday at 34,212.

The S&P 500 rose 30 points, or 0.69%, to 4,369.

The tech-heavy Nasdaq increased 111 points, or 0.83%, to finish the session at 13,573.

The VIX volatility index, also known as the fear index, dove 2.6% to 14.62.

The 10-year US Treasury yield, meanwhile, rose 1.6% to 3.822%.

The dollar index shed 0.35% to 103.29, and the euro rose 0.3% to $1.0790 against the greenback.

Precious metals were in negative territory, with gold losing 0.8% to $1,942 per ounce and silver trimming 1.7% to $23.66.

Oil prices were up more than 3.5%, with global benchmark Brent crude at $74.16 per barrel and US benchmark West Texas Intermediate at $69.29.