U.S. stocks settled sharply higher on Thursday, after an earlier sell-off earlier in the session.

Traders digested the consumer prices index, which showed the annual inflation rate in the US easing for the third straight month to 8.2% in September, the lowest in seven months, down from 8.3% in the previous month. However, analysts were expecting a reading of 8.1%.

All the major sectors on the S&P 500 closed on a higher note, with financials and energy stocks recording the biggest surge on Thursday.

The Chicago Board Options Exchange's CBOE Volatility Index (VIX) fell 4.7% to 31.99 points.

What is CBOE Volatility Index?

The CBOE Volatility Index, popularly known as VIX, is a measure of the equity market's expectation of volatility based on S&P 500 index call and put options.