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A wave of bullish sentiment swept through Wall Street on Tuesday after lower-than-expected producer inflation data solidified expectations for Federal Reserve rate cuts, prompting speculators to increase bets on a more significant 50-basis-point move.

The Producer Price Index (PPI) edged higher by only 0.1% from the previous month, falling short of the anticipated 0.2% increase, and marked a 2.2% rise year-over-year, down from the previous 2.7% print.

Traders adjusted their bets on a September rate cut, now assigning a higher probability to a larger 50-basis-point cut at 55% compared to a 45% chance for a smaller 25-basis-point reduction.

The S&P 500 rose 1.1%, the Nasdaq climbed 1.8% and the Dow Jones gained 250 points or 0.6% by midday trading in New York.

Treasury yields fell across all maturities, with the rate-sensitive two-year yield declining by 6 basis points. The U.S. dollar index lost ground against other major currencies and fell 0.3% against the Japanese yen.

Commodities took a breather after Monday’s strong gains, driven by escalating geopolitical risks in the Middle East. Oil prices retreated by 1.8%, pulling energy stocks lower, while gold remained steady, hovering just under 1% below its record highs.

Bitcoin BTC/USD rose 0.6%, eyeing the second-straight session of gains.

Tuesday’s Performance In Major US Indices, ETFs

Major Indices Price 1-day %chg Nasdaq 100 18,873.07 1.8% S&P 500 5,409.01 1.2% Russell 2000 2,082.91 1.1% Dow Jones 39,608.08 0.6% Updated at 12:20 p.m. ET

According to Benzinga Pro data:

The SPDR S&P 500 ETF Trust SPY rose 1.1% to $539.43.

rose 1.1% to $539.43. The SPDR Dow Jones Industrial Average DIA was trading 0.7% higher to $396.47.

was trading 0.7% higher to $396.47. The tech-heavy Invesco QQQ Trust Series QQQ rallied 1.9% to $460.05.

rallied 1.9% to $460.05. The iShares Russell 2000 ETF IWM tumbled 1.1% to $206.85.

tumbled 1.1% to $206.85. The Technology Select Sector SPDR Fund XLK outperformed, up by 2.5%. The Energy Select Sector SPDR Fund XLE lagged, down by 0.9%.

Monday’s Stock Movers

Starbucks Corp. SBUX skyrocketed over 20% following the announcement that Brian Niccol will take the helm as the company’s new CEO, departing from Chipotle Mexican Grill Inc. CMG . The reaction marked the strongest one-day surge since the coffee-chain giant went public in 1993.

skyrocketed over 20% following the announcement that will take the helm as the company’s new CEO, departing from . The reaction marked the strongest one-day surge since the coffee-chain giant went public in 1993. Shares of CMG plummeted over 9%. The company appointed former chief operating officer Scott Boatwright as interim CEO.

as interim CEO. Home Depot, Inc. HD rose over 2% after reporting stronger-than-expected revenue and profits last quarter.

rose over 2% after reporting stronger-than-expected revenue and profits last quarter. Other stocks reacting to company earnings reports included On Holding AG ONON , up 7.4%, Loar Holdings Inc. LOAR , up 15.4%, Pacs Group Inc. PACS , up nearly 16%, Dyne Therapeutics Inc. DYN , down 0.2% and Talen Energy Corp. TLN up 6.7%.

, up 7.4%, , up 15.4%, , up nearly 16%, , down 0.2% and up 6.7%. Companies slated to report after the close include Nu Holdings Ltd. NU and XP Inc. XP

Photo via Shutterstock.

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