The Nasdaq surged 296.50 points (1.4%) to 21,681.90, the S&P 500 jumped 72.31 points (1.1%) to 6,445.76 and the Dow shot up 483.52 points (1.1%) to 44,458.61.

Wall Street rose after July's inflation report showed the CPI up 0.2%, matching forecasts. Annual inflation stayed at 2.7% instead of the expected 2.8%. Core CPI rose 0.3%, also in line with estimates.

Core inflation's annual rate hit 3.1%, above the 3% forecast. Traders now see a 94.4% chance of a Fed rate cut in September, despite the higher core number.

Airline stocks substantial moved upwards, with the NYSE Arca Airline Index soaring by 9.3% to its best closing level in five months. Semiconductor stocks were significantly strong , as reflected by the 3.0% surge by the Philadelphia Semiconductor Index. Steel, housing, banking and computer hardware stocks too were considerably strong , moving higher along with most of the other major sectors.

Asia-Pacific stocks moved mostly higher. Japan's Nikkei 225 Index surged by 2.2% while China's Shanghai Composite Index climbed by 0.5%. The major European markets turned in another mixed performance on the day. While the German DAX Index dipped by 0.2%, the U.K.'s FTSE 100 Index crept up by 0.2% and the French CAC 40 Index advanced by 0.7%.

In the bond market, treasuries moved back to the downside following yesterday's modest rebound. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose 2.0 bps to 4.29%.

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