Stock market today: Wall Street rallies with bitcoin and gold after inflation unexpectedly slows [Video]

BANGKOK – U.S. stocks are jumping amid a worldwide rally Wednesday following a surprisingly encouraging update on inflation.

The S&P 500 was 1.2% higher in midday trading and on track to add to its all-time high set a day earlier. The Dow Jones Industrial Average was up 134 points, or 0.3%, as of 11:20 a.m. Eastern time, and the Nasdaq composite was 1.9% higher.

The action was even stronger in the bond market, where Treasury yields tumbled after the report showed U.S. consumers paid prices that were 3.3% higher for food, insurance and everything else last month, versus a year earlier. Economists had been expecting to see the inflation rate stuck at 3.4%.

For Wall Street, a slowdown in inflation not only helps U.S. households struggling to keep up with fast-rising prices, it also opens the door for the Federal Reserve to cut its main interest rate. Such a move would ease pressure on …