U.S. stocks were climbing after cooler than expected inflation report

By Liz Moyer

Investing.com -- U.S. stocks were rising after a key inflation reading for March came in cooler than expected.

At 10:09 ET (14:09 GMT), the Dow Jones Industrial Average was up 174 points or 0.5%, while the S&P 500 was up 0.5% and the NASDAQ Composite was up 0.3%.

The consumer price index rose 5% for the year through March compared with expectations for 5.2%, and the core CPI , which excludes fuel and food, rose 5.6% for the year, which was inline with expectations.

For the month, CPI rose 0.1% and core CPI rose 0.4%, which beat expectations and met them, respectively. 

Evidence of cooling prices is something the Federal Reserve’s policymakers have been wanting to see. But it might not be enough to convince them to pause their rate hikes when they next meet in May.

Futures traders are still betting that the Fed will raise rates by a quarter of a percentage point next month. 

This comes even after the turmoil in the banking sector in March after two large bank failures. Banks are expected to rein in credit as a result, which will also cool the economy. That has left some investors to believe the Fed will soon end its aggressive stance in fighting inflation with rate increases. 

The Fed’s meeting minutes from March will be released later today, and investors will be reading it closely for any clues about what the next move might be. 

On Tuesday, Chicago Fed President Austan Goolsbee said the central bank should be cautious about raising interest rates after the stress in the banking sector.

American Airlines Group (NASDAQ: AAL ) shares dropped 7% after the carrier forecast first-quarter earnings below analyst estimates.

Oil rose. Crude Oil WTI Futures were up 1.7% to $82.88 a barrel, and Brent Oil Futures were up 1.7% to $87.08 a barrel. Gold Futures were up 0.3% to $2,025.