US markets closed higher as the latest inflation data reassured investors that the Federal Reserve would start cutting US interest rates next month. The Dow Jones Industrial Average gained 243 points or 0.6% to 40,008.  

The Nasdaq Composite gained 5 points to close at 17,193. The S&P 500 rose 21 points, or 0.4 percent to 5,455. The S&P 500 and Nasdaq ended higher for the fifth straight session.

The latest U.S. consumer price data, released on Wednesday, reinforced expectations that the Fed would start interest rate cuts in September.

U.S. consumer prices rose moderately in July, and the annual increase in inflation slowed to below 3% for the first time since early 2021. A day earlier, softer-than-expected producer prices data indicated inflation continued to moderate, although not yet to the U.S. central bank’s 2% target.

Shares of Alphabet, the Google parent, dropped 2.3% on a report that the US Department of Justice is considering options that include breaking up the online search engine.