The three major U.S. stock indices successfully rebounded in a single day.
The Nasdaq reclaimed the 26,000 level, while the Dow and S&P 500 also closed with solid gains.
The technology, materials, and communication sectors all rose by over 1%, leading the market rally.
Concerns over additional interest rate hikes by the Federal Reserve eased rapidly as the U.S. Consumer Price Index (CPI) for June came in lower than market expectations, showing a significant slowdown.
The June CPI fell 0.4% from the previous month, marking the largest decline in 6 years since the early days of the COVID-19 pandemic, signaling a substantial easing of inflationary pressure.
As Federal Reserve Chair Kevin Warsh reaffirmed his commitment to price stability during his testimony before the House of Representatives, the market-implied probability of an interest rate hike this month plummeted from 42% the previous day to 17%.
Additionally, international oil prices, which had been surging due to geopolitical risks, saw their upward momentum cool after President Trump withdrew his plan to impose transit fees in the Strait of Hormuz just one day after announcing it.
Among major stocks, AI-related semiconductor shares, which had plunged the previous day, showed a strong rebound in a single day.
In particular, SK Hynix ADR drew significant market attention by soaring over 27% following analysis that it was undervalued.
Large bank stocks, which have entered the full-scale earnings season, also supported the rally by reporting better-than-expected results, with Goldman Sachs surging 9%.
It was a day where lower-than-expected inflation data and strong earnings from major companies calmed geopolitical risks from the Middle East, bringing a sense of relief to the market.
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