Wall Street Rallies as Fed Gets All-Clear to Cut: Markets Wrap

A relatively tame inflation reading combined with more signs of jobs cooling spurred a rally on Wall Street amid speculation the Federal Reserve will slash interest rates for the first time this year.

The highly anticipated consumer price index showed that while inflation is still above the Fed’s 2% target, it’s not spinning out of control. Alongside that report came the usually noisy jobless-claims figures, which jumped to the highest in almost four years, emboldening bets policymakers will cut rates next week in an effort to counter a rapid slowdown in the labor market.

Stocks rally on Fed wagers.

Photographer: Michael Nagle/Bloomberg

That was enough to boost ...