NEW YORK: Wall Street stocks advanced Tuesday as US producer inflation came in cooler than anticipated but signaled price increases are still easing gradually as hoped – putting the central bank on track for rate cuts.

The Dow Jones Industrial Average rose 0.5 percent to 39,533.24, while the broad-based S&P 500 bounced 0.8 percent to 5,386.48.

The tech-heavy Nasdaq Composite Index jumped 1.2 percent to 16,980.53.

July’s producer price index (PPI) report contained “good inflation news,” giving the market a lift, according to Patrick O’Hare of Briefing.com.

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PPI rose 0.1 percent month-on-month, slightly less than economists forecast and also down from June’s increase, said the Labor Department.

“The key takeaway from the report is the disinflation trend,” said O’Hare, noting that this is moving in the direction needed to drive an interest rate cut by the Federal Reserve.

Economists at High Frequency Economics added that the report did not “call out any aggressive decline in producers prices,” noting that moderate slowing means Fed policymakers can approach rate cuts cautiously.

“It does not call out for emergency or massive rate cuts to avert an inflation undershoot, either,” the economists said.

Meanwhile, investors eyed leadership changes at Starbucks, with the coffee chain on Tuesday naming Chipotle Mexican Grill’s boss Brian Niccol as its new chief executive.

Starbucks shares surged 20.9 percent shortly after trading began, while Chipotle shares slumped 11.1 percent.

Among other companies, Home Depot shares ticked down 0.5 percent after its earnings beat expectations but it reported weaker guidance for the year.