Stocks Edge Higher as Inflation Cools, Chip Rout Tempers Rally

Wall Street received a second consecutive benign inflation report, prompting a broad market relief rally. Equities edged higher, Treasury yields fell, and the dollar weakened as traders continued to unwind bets on near-term Federal Reserve tightening.

The rally, however, was kept in check by a prolonged selloff in semiconductor stocks. The chip rout prevented the advance from becoming too exuberant, highlighting persistent sector-specific headwinds.

Bond markets rallied on the inflation data, reinforcing expectations that the Fed may hold rates steady. Currency markets saw the dollar slip as rate-cut anticipation weighed on the greenback.