The Nasdaq, which brings together many technology companies very sensitive to interest rates, jumped 1.15% to 13,918.96 points, the Dow Jones gained 0.25% to 34,347.43 points and the broader S&P 500 index advanced 0.74% to 4,472.16 points.

Both the Nasdaq and the S&P 500 hit new one-year highs.

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) target of 2% but could reflect "a downward trend that will accelerate by the end of the year," responded Andrew Hunter of Capital Economics.

The U.S. central bank (Fed) 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 markedly on Wednesday.

"The inflation outlook is weak enough to suggest that the July rate hike will be the last of the cycle," Karl Haeling of LBBW told AFP. "The market is showing some optimism for a soft landing," he added.

Bond yields reacted strongly to this softening of price increases, easing sharply to 4.73% from 4.87% the previous day for two-year bills and 3.85% from 3.97% for ten-year bonds.

The dollar slipped to a 16-month low against the euro at $1.1137 per euro, falling 1.16% around 19:35 GMT.

In another favorable vein, the Fed released its Beige Book, the last economic report before its monetary meeting at the end of July. This barometer shows that growth is resilient, but price pressure is weakening and the labour market is relaxing, which is a good point for inflation.

"Labor market conditions continue to ease gradually, which helps moderate wage growth, which will also help lower inflation," said Michael Pearce, an economist at Oxford Economics.

On the stock market, while several quarterly banking results are expected this week, some bank securities were sought after such as Goldman Sachs (+1.72%) or Citigroup (+1.83%).

The big names in technology also had the wind in their sails from Amazon (+1.57%) to Meta (+3.70%).

Microsoft savored (+1.42%) its victory the day before a judge against the competition authority FTC which had risen against the acquisition of video game manufacturer Activision (-1.09%).

Nvidia, the darling of enthusiastic investors for the artificial intelligence sector, jumped 3.53% to $439.02.

But it is Domino's Pizza that has sharpened 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