US stocks opened higher on Wednesday after investors responded to another softer-than-expected inflation report and a fresh round of corporate earnings.

Chip stocks fell even after upbeat guidance from ASML.

The Dow Jones Industrial Average added roughly 148 points, or 0.28%.

The S&P 500 rose 0.47%, while the Nasdaq Composite gained about 0.67%.

The gains came after data showed that the Producer Price Index (PPI) unexpectedly declined 0.3% in June, compared with expectations for no monthly change.

The report followed Tuesday’s weaker-than-expected Consumer Price Index reading, reinforcing expectations that inflationary pressures may be easing.

Market participants reduced expectations for an immediate Federal Reserve interest rate increase following the latest inflation data.

According to CME’s FedWatch Tool, the probability of a rate hike at the Fed’s July meeting fell to around 16%-17%, down sharply from more than 40% before Tuesday’s CPI report.

However, traders continued to expect at least one rate increase later this year, with markets assigning a high probability of a September hike.

Investors were also awaiting the second day of Federal Reserve Chair Kevin Warsh’s testimony before Congress after he cautioned on Tuesday that a single inflation reading was not sufficient to declare victory over rising prices.

Corporate earnings remain in focus

Second-quarter earnings continued to shape market sentiment, with another round of financial companies reporting results.

BlackRock shares climbed more than 7% in trading after the asset manager reported quarterly earnings that exceeded analyst expectations, supported by higher client asset values during the market rally.

Morgan Stanley also topped Wall Street profit estimates for the second quarter, benefiting from stronger mergers and acquisitions activity. Its shares traded modestly higher before the opening bell.

The strong bank results helped reinforce optimism surrounding the early stages of the earnings season.

Investors are closely monitoring corporate earnings after the S&P 500 has gained more than 10% this year and closed Tuesday less than 1% below its June record high.

Elsewhere, PayPal surged nearly 15% in trading after Reuters reported that payments company Stripe and private equity firm Advent International had jointly offered to acquire the company for $60.50 per share, representing a significant premium to its previous closing price.

Not all earnings reactions were positive.

Elevance Health fell 11% despite raising its annual profit forecast, as investors viewed the revised outlook as falling short of expectations.

Chip stocks falls even as ASML raises outlook

Semiconductor reversed premarket gains after ASML raised its financial outlook for 2026 for the second time this year, reinforcing confidence in continued artificial intelligence-driven demand.

The VanEck Semiconductor ETF was in red. ASML rose around 1%, while Intel and Lam Research fell more than 0.5%.

Despite the improved inflation outlook, geopolitical developments continued to limit broader market enthusiasm.

Oil prices remained elevated after the US military launched another round of strikes against Iran.

West Texas Intermediate crude futures rose about 0.6% to trade above $79 per barrel, while Brent crude futures gained roughly 0.7% to trade above $85 per barrel.

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The gold market regained momentum on Wednesday after weaker-than-expected US wholesale inflation data boosted investor sentiment and eased expectations of aggressive US monetary policy tightening.

Gold prices rebounded from earlier losses and traded around $4,070 per ounce following the inflation report.

Data released by the US Labour Department showed the Producer Price Index (PPI) fell 0.3% in June, reversing May’s downwardly revised 0.6% increase.

The reading came in below economists’ expectations, who had forecast producer prices to remain unchanged during the month.

Earlier rally fades as geopolitical concerns return

Earlier on Wednesday, gold traded lower, as investors reassessed the broader inflation outlook.

The market’s initial optimism after softer US consumer inflation data gave way to concerns that renewed geopolitical tensions in the Middle East could drive energy prices higher and keep inflationary pressures elevated.

Earlier in the day, spot bullion fell 0.5% to $4,035.67 an ounce by 0300 GMT, while August gold futures declined 0.7% to $4,042.20.

The losses partially reversed Tuesday’s strong rally of more than 2%, during which spot gold climbed to $4,100.49 after June consumer inflation data came in below expectations.

Wholesale inflation cools more than expected

The report also showed that core producer prices, which exclude volatile food and energy costs, increased 0.2% in June following May’s downwardly revised 0.1% increase.

Over the past year, core PPI advanced 5.1%.

The softer inflation readings encouraged buying interest in the precious metals market.

The improved performance reflected growing optimism among investors as cooling inflation prompted markets to scale back expectations for an aggressive US monetary policy path.

On an annual basis, wholesale inflation rose 5.5% over the past 12 months, below consensus estimates of 6.2%, the report showed.

The market is caught between inflation relief and oil price risks

The gold market is now balancing two competing themes.

On one hand, softer-than-expected inflation data has eased immediate concerns over higher interest rates, improving sentiment toward bullion.

On the other hand, investors remain cautious that renewed fighting in the Middle East could push oil prices higher, potentially reigniting inflationary pressures.

This combination has created mixed trading conditions for gold, with investors weighing the supportive impact of cooling inflation against the possibility of another energy-driven price shock.

Silver prices also moved lower on Wednesday.

The decline came as escalating geopolitical tensions in the Middle East weighed on investor sentiment, offsetting support from a weaker US dollar following the softer-than-expected US inflation data.

While weaker inflation generally provided support to precious metals by reducing expectations for aggressive monetary policy, geopolitical uncertainty continued to influence broader market positioning, leaving both gold and silver caught between improving inflation trends and renewed concerns over energy-driven price pressures.

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Gold prices recovered strongly on Tuesday, reversing losses from a sharp sell-off as cooler-than-expected US inflation data reinforced expectations.

The precious metal had come under pressure in the previous session, briefly touching a two-week low as investors refrained from placing large bets ahead of the release of the US CPI data and Federal Reserve Chair Kevin Warsh’s congressional testimony.

However, sentiment shifted dramatically after inflation figures came in well below market expectations, triggering a sharp rally in bullion.

Gold recovers after sharp sell-off

In the previous session, spot gold rose 0.3% to $4,013.93 an ounce by 0300 GMT after falling to its weakest level since July 1.

US gold futures for August delivery gained 0.4% to $4,020.80.

The modest recovery came after bullion had fallen nearly 3% on Monday, marking its steepest one-day decline in more than a month.

Investors largely stayed on the sidelines ahead of key US economic data and congressional testimony from Federal Reserve Chair Kevin Warsh.

Softer inflation changes market sentiment

Investor sentiment shifted significantly after the US Bureau of Labor Statistics released its June inflation report on Tuesday.

According to the agency, the Consumer Price Index (CPI) fell 0.4% in June after increasing 0.5% in May.

The reading was considerably cooler than economists’ expectations, which had called for a decline of 0.1%.

“This decline in the all-items index was the largest 1-month decrease since April 2020, when it fell 0.8%,” the report said.

On an annual basis, headline inflation rose 3.5% over the past 12 months, easing from 4.2% recorded in the previous month.

The reading also came in below economists’ expectations of 3.8%.

Meanwhile, core CPI, which excludes volatile food and energy prices, remained unchanged in June after rising 0.2% in May.

Economists had expected another 0.2% monthly increase.

Annual core inflation slowed to 2.6% from 2.9% reported in May.

Gold jumps toward $4,100

The softer inflation data provided a significant boost to the gold market, as investors viewed the figures as giving the Federal Reserve greater flexibility to leave interest rates unchanged during the remainder of the year.

Gold prices surged nearly $60 immediately after the inflation report was released.

Although bullion remained just below the $4,100-an-ounce mark, the rally marked a sharp reversal from the weakness seen in the previous session.

Spot gold was last trading at $4,087.40 an ounce, up more than 2% on the day.

The rebound effectively erased much of the previous session’s weakness, when prices had slipped to a two-week low amid cautious positioning ahead of the inflation release.

The stronger-than-expected recovery underscored how sensitive the gold market remains to US inflation data and expectations surrounding future Federal Reserve monetary policy.

With inflation cooling more sharply than anticipated and both headline and core price pressures easing, bullion found renewed buying interest after a volatile start to the week, pushing prices back toward the key $4,100-an-ounce level.

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