NEW YORK: Wall Street stocks added to records early Wednesday as a closely-watched US report showed inflation moderating in July.

The consumer price index rose 0.5 percent last month, seasonally adjusted, after a 0.9 percent surge in June, the Labor Department said.

The moderation in price growth "feeds into the 'peak inflation' narrative," said Briefing.com analyst Patrick O'Hare, while adding that the report suggested inflation could still linger at high levels.

"Frankly there is enough in the CPI report to spin the inflation narrative either way, so it wouldn't be a surprise to see another mixed day of trading," O'Hare said.

About 20 minutes into the session, the Dow Jones Industrial Average was up 0.6 percent at 35,462.21.

The broad-based S&P 500 added 0.3 percent at 4,448.18, while the tech-rich Nasdaq Composite Index advanced 0.1 percent to 14,798.45.

US stocks dip as markets weigh infrastructure, virus news

The inflation report had been seen as a critical data point for the Federal Reserve ahead of the annual central banking conference in Jackson Hole, Wyoming later this month. Fed Chair Jerome Powell is due to speak at the conference and in recent days, Fed officials have hinted the US central bank could soon announce a plan to reduce its stimulus program.

Among individual companies, Southwest Airlines dipped 0.3 percent after it reported a recent slowdown in bookings and uptick in cancelations, likely due to the latest rise in Covid-19 infections.