Wall Street's main indexes opened higher on Wednesday after data showed inflation cooled further in June, lifting investor hopes that the Federal Reserve is nearing the end of its monetary tightening cycle.

The Dow Jones Industrial Average rose 133.86 points, or 0.39%, at the open to 34,395.28.

The S&P 500 opened higher by 28.43 points, or 0.64%, at 4,467.69, while the Nasdaq Composite gained 154.94 points, or 1.13%, to 13,915.64 at the opening bell.

Government data released at 8:30 a.m. showed that after two years of painfully high prices, inflation in the United States has reached its lowest point in more than two years — 3% in June compared with 12 months earlier — a sign that the Federal Reserve’s interest rate hikes have steadily slowed price increases across the economy.

The consumer price index (CPI) inflation figure the government reported Wednesday was down sharply from a 4% annual rate in May, though still above the Fed’s 2% target rate. Over the past 12 months, gas prices have dropped, grocery costs have risen more slowly and used cars have become less expensive.

From May to June, overall prices rose 0.2%, up from just 0.1% in the previous month but still comparatively mild.

"Today's CPI report is seen as pivotal because it could determine whether one more Fed hike for the road is going to prove enough," Elwin de Groot, head of macro strategy at Rabobank, wrote in a note ahead of the June CPI print.

"Yet there is sufficient reason to remain cautious as core inflation recently has been more persistent than it has been historically."

Supporting megacap growth and technology stocks, rate-sensitive two-year and 10-year Treasury yields slipped ahead of the data.

A jobs report last week hinted at a still-tight labor market. But traders took comfort in central bank policymakers' comments that the Fed was nearing the end of its tightening cycle, and Wall Street closed the last two sessions higher.

Investors have priced in 92.4% odds of the Fed hiking rates by 25 basis points later this month to a 5.25%-5.50% range, according to CME Group's Fedwatch tool. They see the Fed holding rates through the end of 2023.

During the day, investors will also parse remarks by a number of Fed officials, including Minneapolis Fed President Neel Kashkari, who is a voting member this year.

At 5:53 a.m. ET, Dow e-minis were up 50 points, or 0.15%, S&P 500 e-minis were up 8.5 points, or 0.19%, and Nasdaq 100 e-minis were up 36 points, or 0.24%.

Focus will shift to second-quarter earnings season later this week, with Wall Street lenders expected to report higher profits for the quarter as rising interest payments offset a reduction in dealmaking.

Netflix inched up 0.6% in premarket trading after brokerage UBS raised its target price on the streaming service provider.

Nvidia added 0.6% after the Financial Times reported that chip designer Arm is in talks to bring the megacap firm in as an anchor investor ahead of its planned listing.