S&P 500 Settles Higher Following Inflation Data, Market Volatility Drops Sharply

The S&P 500 settled higher on Tuesday, as investors digested the recent inflation data.

The annual inflation rate in the US eased to 6% in February, the lowest level since September 2021, in line with market expectations, and versus 6.4% in the previous month.

Financial stocks rebounded on Tuesday, after the S&P 500 Banks index recorded its steepest single-session drop since June 2020.

Financial markets are now expecting the Federal Reserve to raise rates by an additional 25 basis points later this month.

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

The Nasdaq 100 jumped 2.32% to close at 12,199.79 on Tuesday, amid gains in shares of Tesla Inc TSLA and Amazon.com, Inc. AMZN.

The S&P 500 rose 1.65%, while the Dow Jones added 1.06% to 32,155.40 in the previous session.

The Chicago Board Options Exchange's CBOE Volatility Index (VIX) dipped 10.5% to 23.73 points on Tuesday.

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.

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