The Dow Jones index gained 0.84%, the Nasdaq, which brings together many technology companies very sensitive to interest rates, jumped 1.26% and the broader S&P 500 index 1.00% around 14:00 GMT.

Inflation slowed sharply in June in the United States to 3% year-on-year, against 4% a month earlier and 3.1% expected, according to the CPI index. Over one month, it advanced by 0.2% while analysts expected 0.3%.

So-called core inflation (excluding food and energy prices) fell to 4.8% from 5.3%, which is still far from the US central bank's (Fed) 2% target.

"This moderate rise in consumer prices will not prevent the Fed from raising rates again later this month, but it does confirm our view that the downward trend in core inflation should accelerate in the second half of the year," said Andrew Hunter of Capital Economics.

The central bank is expected to raise interest rates again by a quarter point on July 26 to between 5.25% and 5.50%, according to projections of futures products. But the likelihood of another hike in September weakened sharply on Wednesday, according to CME Group calculations.

"While he will have raised rates in July, we think the Federal Reserve's Monetary Committee should keep them at 5.4 percent by the end of the year," said Rubeela Farooqi, chief economist at HFE.

Bond yields reacted strongly, easing sharply to 4.73% from 4.87% the previous day for two-year bonds and 3.89% from 3.97% for ten-year bonds.

And above all, the dollar skidded to the lowest in more than a year against the euro to 1.1094 dollar for one euro (-0.77%) around 14:00 GMT. Against the Swiss franc, the greenback even fell to its lowest level since 2015.

If, as investors speculated in the face of this slowdown in inflation, the Fed raises rates only once this year, this limits the attractiveness of dollar investments in favor of the euro because the European Central Bank (ECB) has not finished with its cycle of rate hikes.

The Vix index, known as the "fear" index because it reflects stock market volatility, was down sharply more than 5% to 14 points.

On the stock market, while several quarterly banking results are expected this week, bank stocks were sought after: JPMorgan gained 1.37% while Bank of America, Citigroup and Wells Fargo gained more than 2%. Goldman Sachs jumped 3.73%.

The big names in technology also had the wind in their sails from Amazon (+1.43%) to Meta (+1.44%) via Tesla (+1.44% also).

Nvidia, the darling of enthusiastic investors for the artificial intelligence sector, climbed 2.40% to $ 434.34.

The online car seller Carvana, although in difficulty, rumbled 4.33% continuing its comeback for a month.

But it was Domino's Pizza that whetted the appetite of investors soaring more than 11% after announcing a deal with Uber that will post its menus on its food delivery app.

© 2023 AFP