Investing.com -- U.S. stocks are surging after data showed that U.S. annual inflation accelerated by less than expected in July.
By 9:37 ET (13:37 GMT), the Dow Jones Industrial Average was up 309 points or 0.9%, while the S&P 500 was up 0.9% and the NASDAQ Composite was up 1%.
Inflation rises more slowly than feared
Annual U.S. inflation accelerated by less than expected in July, with the headline consumer price index holding steady at 0.2% month-on-month, meeting estimates. Yearly, the reading increased by 3.2%, quickening from 3.0% in June. Economists had expected the figure to jump by 3.3%.
Meanwhile, core CPI, which strips out volatile items like food and energy, was also unchanged at 0.2% monthly. Year-on-year, the core figure rose by 4.7%, a slower rate than the projected uptick of 4.8%.
While these figures suggest that inflation remains sticky, they also point to a possible easing in price pressures and potentially bolster the case for the Federal Reserve to pull back from its long-standing cycle of interest rate increases.
The Federal Reserve next meets in September, and officials have said in recent days that they could be near a point where they could pause on further interest rate hikes.
Positive Disney results boost sentiment
This has added to the optimism generated by solid numbers from entertainment giant Walt Disney (NYSE:DIS).
Walt Disney stock was up 1% boosting sentiment in the wider market, after the entertainment colossus announced plans to increase the prices of its streaming service and crack down on password sharing to help offset sputtering performance in its film and television divisions.
The streaming unit, which includes options like Disney+ and Hulu, narrowed its losses by more than anticipated in its fiscal third quarter following a bump up in subscription prices and marketing cost cuts.
Disney has also created a task force to study artificial intelligence and how it can be applied across the entertainment conglomerate, Reuters reported, citing three sources.
The tech sector is likely to be in focus after U.S. President Joe Biden unveiled a ban on some investments into Chinese tech companies, opening up the possibility of retaliation.
Crude drifts lower ahead of CPI release
Oil prices edged lower Thursday in a bout of profit taking, but remained near multi-month highs ahead of key U.S. inflation release.
U.S. crude inventories unexpectedly grew in the week of August 4, data from the Energy Information Administration showed Wednesday. However, there was also a much bigger-than-expected draw in gasoline and distillate stockpiles, suggesting U.S. fuel demand remained robust.
Oil prices have been boosted in recent days by extensions to output cuts by Saudi Arabia and Russia, exacerbating supply tightness.
Crude Oil futures were down 0.7% to $83.78 a barrel, while Brent was down 0.5% to $87.17 a barrel. Gold rose 0.3% to $1,956.
(Peter Nurse and Oliver Gray contributed to this item.)