Stocks rose sharply on Wednesday after a key inflation reading showed a decline which was much more than what was expected.
Nasdaq Composite rose more than 2%. The S&P 500 hit its highest level since early May by gaining gained 1.7%, while the Dow Jones Industrial Average jumped by roughly 1.6%. Bitcoin also jumped by 2%.

The headline consumer price index for July rose 8.5% year over year and was considered flat when compared to that of June. Economists surveyed by Dow Jones were expecting an increase of 8.7% and 0.2%, respectively.

Core inflation, which strips out energy prices and volatile food, also saw an increase that was less than what was expected.

The report will be weighed by the Federal Reserve, along with other key economic data, this will be done ahead of the meeting in September where interest rates have been slated to hike.

“The reduced value in the CPI report for July is coming as a big relief for the Federal Reserve, especially since the Fed insisted that inflation was transitory, which was incorrect. And founder of Quadratic Capital Management, Nancy Davis said that if inflation prints continue to decline, the Federal Reserve may start to slow down the pace of monetary tightening.”

Major tech stocks were outpacing the broader market on Wednesday, with Netflix and Tesla climbing more than 3% each. Salesforce was the best performer in the Dow, rising by 3.5%.

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