U.S. markets closed higher on Tuesday after a closely watched Labor Department report showed that consumer prices in the U.S. fell significantly more than expected in June. The Labor Department said its consumer price index fell by 0.4 percent in June after climbing by 0.5 percent in May. Street had expected consumer prices to edge down by 0.1 percent. The report also said the annual rate of consumer price growth slowed to 3.5 percent in June from 4.2 percent in May, coming in below street estimates for a 3.8 percent jump. Additionally, traders took note of the Labor Department’s report that core consumer prices, which exclude food and energy prices, came in unchanged in June after rising by 0.2 percent in May. Street had expected core prices to increase by another 0.2 percent. The annual rate of growth by core consumer prices slowed to 2.6 percent in June from 2.9 percent in May, while street had expected the pace of growth to slip to 2.8 percent.
On the sectoral front, computer hardware stocks saw a substantial rebound after falling sharply on Monday, driving the NYSE Arca Computer Hardware Index up 2.7 percent. Semiconductor stocks also rebounded significantly, with the Philadelphia Semiconductor Index climbing 2.5 percent. Steel, gold, and networking stocks also posted strong gains, while pharmaceutical, healthcare, and airline stocks showed notable weakness.
Nasdaq surged 233.83 points or 0.9 percent to 26,107.01, S&P 500 jumped 28.25 points or 0.38 percent to 7,543.59 and Dow Jones Industrial Average increased 9.63 points or 0.02 percent to 52,508.27.
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