Soft Inflation Sparks Modest Stock Rally as Fed Bets Shift

U.S. stocks advanced modestly as cooler inflation data tempered bets on aggressive Fed rate hikes: the S&P 500 rose about 0.5% and the Nasdaq roughly 0.7%, while the Dow slipped around 0.1%. July producer prices rose less than expected, echoing a cooling CPI, which renewed hopes for slower tightening this year though policymakers remain divided and investors still price in at least one rate hike by year-end. Cisco and Cerebras fell after earnings, Applied Materials is due after the close, and initial jobless claims edged higher to 209,000 while continuing claims declined. Oil prices also eased amid shifting dynamics around the Strait of Hormuz as markets awaited further earnings data.