us stocks traded higher wednesday after data showed the rate of inflation in june slowed to the lowest level since early 2021 fueling hopes that the fed may be close to being done with its interest rate hikes on tuesday the dow jones industrial average rose 317 points or 093 to 34261 the sp 500 increased 30 points or 067 to 4439 and the nasdaq composite gained 75 points or 055 to 13761 stocks rose while treasury yields and the dollar were lower after data on wednesday showed us inflation at its slowest pace in more than two years us consumer prices rose a modest 02 in june economists polled by the wall street journal forecasted an increased of 03 the yearly rate of inflation decelerated to 3 from 4 in the prior month marking the lowest level since march 2021 the socalled core rate of inflation that omits food and energy rose a mild 02 last month thats the smallest increase in almost two years wall street had forecast a 03 gain the annual rate of core inflation decreased to 5 from 53 in the prior month see us inflation slows again cpi shows as fed weighs another rate hike the markets have been receiving the cpi print pretty well said brian katz chief investment officer at the colony group the lowerthanexpected cpi data is likely to prolong the uptrend in stocks that weve been experiencing this year katz in a call as long as we are in this environment where disinflation continues and we have reasonable growth it is a good environment for risk assets katz said inflation in june fell in a majority of the important categories most notably housing prices which had been elevated according to george mateyo chief investment officer at key private bank the fed will embrace this report as validation that their policies are having the desired effect  inflation has fallen while growth has not yet stalled but it most likely wont change their mind to raise interest rates later this month mateyo wrote in emailed comment wednesday fed fund futures traders are still pricing in an over 90 chance that the fed will raise its benchmark interest rate by 25 basis points in its meeting later this month according to cme fed watch they are pricing in a 129 likelihood that the us central bank will raise interest rate again in september that is down from 223 a day ago still some analysts are optimistic that the fed may cease its interest rate hikes the inflation print in june is enough on a standalone basis for the market to put in question the feds dot projections of two additional hikes left this year and consequently pull interest rate volatility down according to alexandra wilsonelizondo deputy chief investment officer of multi asset solutions at goldman sachs asset management yet despite the disinflationary trends the level of fed funds rate has only risen to levels comparable to inflation this contrasts with previous hiking cycles when the fed hiked rates well above inflation therefore we continue to expect that us monetary policy will stay restrictive for longer but after this print the fed very well may be done wilsonelizondo wrote in emailed comment there will also be a batch of commentary from fed officials for the market to contend with on wednesday us government bank regulators should run a new highinflation stress test to identify atrisk banks and be able to better gauge their capital shortfalls said minneapolis federal reserve president neel kashkari on wednesday the potential losses banks face today from interest rate risk appear to be more idiosyncratic than systemwide and this highinflation stress test would help banks prepare for a worsethanexpected scenario kashkari said in a blog post and a subsequent panel discussion on bank stability hosted by his regional fed bank atlanta fed president bostic will make comments at 1 pm and the fed beige book will be released at 2 pm all times eastern this content was created by marketwatch which is operated by dow jones  co marketwatch is published independently from dow jones newswires and the wall street journal