Stocks posted broad-based gains on Tuesday in relatively light volume, on better-than-expected inflation data and optimism that tomorrow’s consumer price trend will allow the Federal Reserve to cut interest rates next month. Solid gains from a blue-chip leader also helped lift sentiment.

Inflation in focus

Federal Reserve Chairman Jerome Powell has repeatedly stated that the Federal Open Market Committee (FOMC) will continue to be data-dependent when it comes to deciding when to cut short-term interest rates from a 23-year high. So it should come as no surprise that market participants are extremely sensitive to the various methods the U.S. government uses to measure price changes.