Data showing inflation falling for the first time since May 2020 boosted betting on the Federal Reserve pivoting to lesser rises at its meeting next week.

Today's session saw a minor increase in US indexes as data showing inflation falling for the first time since May 2020 boosted betting on the Federal Reserve pivoting to lesser rises at its meeting next week.

The S&P 500 gained 0.39%, the Dow gained 0.69%, and the Nasdaq gained 0.60%.

Consumer prices declined by 0.1% in December, somewhat quicker than experts predicted. The December drop in consumer prices was the first since May 2020, lowering the year-on-year CPI to 6.5% from 7.1% in November.

Core inflation climbed 0.3%, as predicted, excluding volatile food and energy costs. Core services inflation, excluding housing, came in at 0.26%, "much lower than this year's average run rate of 0.5%," according to Morgan Stanley.

Fed leaders such as Philadelphia Fed President Patrick Harker supported a modest 0.25% boost next month, while St. Louis Fed President James Bullard urged the Fed should raise and keep rates above 5% "as soon as practicable."

Treasury rates fell as expectations on an earlier Fed pause gained traction, with 10-year Treasury yields approaching 4%.

As Treasury rates fell, the technology sector, headed by Meta Platforms Inc and Microsoft Corporation, extended recent advances.

Energy was the largest gainer, benefiting from increased oil prices and continued confidence about demand from China's reopening.

Among the largest companies in the industry were Hess Corporation, APA Corporation, and EQT Corporation.

Meanwhile, American Airlines rose more than 7% as the carrier raised its fourth-quarter revenue and profit guidance due to rising rates and pent-up demand for travel.

The Walt Disney Company rose 4% as activist investor Nelson Peltz prepared for a proxy fight to secure a seat on the board after his request was denied.

Trian Partners, which has around a 0.5% investment in Disney, is advocating for improvements at the entertainment firm such as greater governance, cost reduction, and an attempt to return the dividend by 2025.

(investing.com, reuters.com)