Stock market today: Stocks soar as investors cheer soft PPI and brace for consumer inflation data

US stocks jumped on Tuesday as investor confidence was boosted by evidence of softer inflation.

The Bureau of Labor Statistics reported that the producer price index rose 0.1% in July, underwhelming estimates of a 0.2% increase. Compared to a year ago, prices were up 2.3%, a cooldown from June.

That brought renewed momentum to equity indexes, with the S&P 500 and Nasdaq rising 1.7% and 2.4%, respectively. The Dow climbed close to 400 points.

Investors will now watch for further disinflationary signals in Wednesday's consumer price index report. According to data from the CME Fedwatch Too l, a majority of traders now expect the Federal Reserve to pursue a 50 basis point interest rate cut next month.

"The runway is clear for the Fed to cut rates in September," Jamie Cox, Harris Financial Group managing partner, said. "If data like this persists, the Fed will have plenty of room to cut rates further this year."

As to worries over US economic growth, markets will get a clearer picture from Thursday's retail sales data. Bank of America expects data to highlight healthy spending, that will help the country dodge a recession.

On Tuesday, Starbucks led the way among major stock gainers, rising 23% on news that Chipotle CEO Brian Niccol would take over the coffee chain's leadership. Shares of Chipotle fell as low as 14% before recovering slightly.

Here's where US indexes stood at the 4:00 p.m. closing bell on Tuesday:

Here's what else is happening:

In commodities, bonds, and crypto:

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