Wall Street: S&P, Nasdaq jump 2% as cooling inflation eases rate hike bets

Fed now seen delivering 50 bps hike in September; US consumer price growth unchanged for July; Musk sells Tesla shares worth $6.9 bn; volatility index hits lowest in over 3 months

Wall Street's main indexes rose more than 1% on Wednesday after data showing a slower-than-expected rise in inflation in July prompted traders to cut their bets on another super-sized rate hike by the U.S. Federal Reserve.

U.S. consumer prices were unchanged in July due to a sharp drop in the cost of gasoline, delivering the first notable sign of relief for weary Americans who have watched prices climb over the past two years.

Traders are now pricing in a 41.5% chance of a 75-basis-point increase in fund rates at the Fed's next meeting in September, compared with 67.5% before the data.

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