The CNN Money Fear and Greed index showed further improvement in the overall market sentiment, while the index remained in the “Greed” zone on Tuesday.

U.S. stocks settled higher on Tuesday, with the S&P 500 surging more than 1% during the session, also closing at new record highs after July's inflation data eased fears that tariff-related cost pressures were widespread.

The headline Consumer Price Index (CPI) came in below expectations, holding steady at 2.7% year-over-year and fueling speculation of upcoming interest rate cuts.

Airline fares, in particular, jumped 4% on a month-over-month basis, causing a rally in airline stocks. President Donald Trump renewed public pressure on Fed Chair Jerome Powell, announcing that he was considering a major lawsuit against Powell over the Fed building renovation expenses.

WideOpenWest, Inc ( WOW ). shares jumped 49% on Tuesday after the company agreed to be acquired for $5.20 per share.

All sectors on the S&P 500 closed on a positive note, with communication services, information technology and financial stocks recording the biggest gains on Tuesday.

The Dow Jones closed higher by around 484 points to 44,458.61 on Tuesday. The S&P 500 rose 1.13% to 6,445.76, while the Nasdaq Composite jumped 1.39% to 21,681.90 during Tuesday's session.

Investors are awaiting earnings results from Brinker International Inc. ( EAT ) , Performance Food Group Co. ( PFGC ) and Cisco Systems, Inc ( CSCO ). today.

What is CNN Business Fear & Greed Index?

At a current reading of 63.1, the index remained in the “Greed” zone on Tuesday, versus a prior reading of 58.4.

The Fear & Greed Index is a measure of the current market sentiment. It is based on the premise that higher fear exerts pressure on stock prices, while higher greed has the opposite effect. The index is calculated based on seven equal-weighted indicators. The index ranges from 0 to 100, where 0 represents maximum fear and 100 signals maximum greediness.

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