Wall Street closes higher Tuesday as US inflation cools; Nasdaq gains 0.9% on chip rebound

US stocks closed higher on Tuesday, 14 July. The S&P 500 rose 0.38% to 7,543 and the Nasdaq Composite added 0.9% to 26,107, while the Dow Jones Industrial Average was little changed, up about 10 points (0.02%) at 52,508.

The main driver was June US inflation data, which unexpectedly fell 0.4% from the prior month and brought the annual rate down to 3.5%. The softer reading eased expectations of a Federal Reserve rate hike and lifted growth and technology shares, with semiconductor stocks rebounding after the previous session's selloff.

Weighing on the Dow, IBM shares sank about 25%, the stock's worst day in decades, after the company warned that second-quarter profit would fall short on soft software demand.