02:07 PM EDT, 08/12/2025 (MT Newswires) -- US benchmark equity indexes were higher intraday following the release of consumer inflation data, which further strengthened the probability of a Federal Reserve interest rate cut in September.

The Nasdaq Composite was up 1.2% at 21,644.8 after midday Tuesday, while the Dow Jones Industrial Average rose 1.1% to 44,448.4. The S&P 500 added 1% to 6,436.3. Barring real estate and utilities, all sectors were higher, led by communication services.

In economic news, US consumer inflation slowed down last month on a sequential basis, while the annual core rate jumped above 3%, official data showed.

"Inflation was broadly in line with expectations as tariffs continue to be largely absorbed within US corporate profit margins," ING Bank said in a report. "This gives the Fed the room to respond to the weaker jobs backdrop and cut interest rates from September."

The odds that the central bank's Federal Open Market Committee will reduce its benchmark lending rate by 25 basis points next month jumped to 94% Tuesday from 86% Monday, according to the CME FedWatch tool.

At the start of this month, official data showed the US economy added fewer jobs than projected in July, while gains in the previous two months were revised down sharply.

The official US producer prices report for last month is scheduled to be released Thursday.

Kansas City Fed President Jeff Schmid said Tuesday that maintaining a "modestly restrictive" monetary policy stance is appropriate for now amid inflation staying above policymakers' target.

"While increased tariffs seem to be having a limited effect on inflation, I view this as a rationale for keeping policy on hold rather than an opportunity to ease the stance of policy," Schmid said.

Separately, Richmond Fed President Tom Barkin said that uncertainty around the economy is lessening, with the path ahead expected to be "bumpy, but bearable."

"We may well see pressure on inflation, and we may also see pressure on unemployment, but the balance between the two is still unclear," Barkin said. "As the visibility continues to improve, we are well positioned to adjust our policy stance as needed."

US Treasury yields were mixed intraday, with the 10-year rate rising 2.4 basis points to 4.3% and the two-year rate dropping 2.1 basis point to 3.73%.

The Organization of the Petroleum Exporting Countries lifted its global oil demand projection for 2026 and raised its world and US economic growth forecasts for this year.

The cartel expects the global economy to continue to expand at a "relatively solid level" through the 2025 second half and into next year, with trade tensions easing slightly as several countries struck trade deals with the US before President Donald Trump's Aug. 1 deadline. However, several major economies, including India, Brazil and Canada have yet to finalize agreements with the US, the OPEC said.

On Monday, Trump signed an executive order to extend the tariff suspension on China for another 90 days.

West Texas Intermediate crude oil was down 1.2% at $63.22 a barrel intraday Tuesday.

In company news, On Holding ( ONON ) posted stronger-than-expected second-quarter sales, prompting the Swiss sneaker maker to raise its full-year guidance. The company's US-listed shares were up 6.9%, among the top gainers on the S&P 500.

Cardinal Health ( CAH ) raised its full-year earnings outlook after its fiscal fourth-quarter bottom line rose above market expectations. The drug distributor agreed to acquire urological healthcare management company Solaris Health in a deal worth $1.9 billion. Cardinal Health ( CAH ) shares fell 7.3%, the steepest decline on the S&P 500.

Gold was down 0.1% at $3,401.60 per troy ounce, while silver rose 0.6% to $38.02 per ounce.