The main U.S. stock indexes opened sharply higher Tuesday after cooler-than-expected inflation data boosted expectations that the Federal Reserve was done raising interest rates.

As of 9:52 a.m. EST, the Dow Jones Industrial Average had soared by 422 points, or 1.23%, while the S&P 500 was up 1.63% and the Nasdaq Composite gained 2.07%

Traders have priced in an 86% chance the Fed will hold interest rates at 5.25%-5.50% range in December, per CME Group's Fedwatch tool. Meanwhile, the odds of the first rate cut in June 2024 have grown recently.

That is in contrast with the recent hawkish messages from Fed officials.

Fed Chair Jerome Powell last week left the door open to further policy tightening should progress toward the Fed's 2% inflation goal stall out.

Fed Vice Chair for Supervision Michael Barr is set to testify before the Senate Banking Committee, while investors will parse comments from Cleveland Fed President Loretta Mester and Chicago Fed chief Austan Goolsbee later in the day.

Focus is also on negotiations by U.S. lawmakers over a funding bill to avert a partial government shutdown beginning on Saturday.

U.S. House Speaker Mike Johnson's plan to avert a government shutdown faces a key test on Tuesday, as he tries to overcome hardline opposition from his own Republican conference, even as some Democrats signal tentative support for the measure.

At 6:16 a.m. ET, Dow e-minis remained unchanged, S&P 500 e-minis were up 2.25 points, or 0.05%, and Nasdaq 100 e-minis were up 26.5 points, or 0.17%.

Snap Inc. shares rose 4.2% premarket following news that Amazon.com will allow Snapchat users in the United States to buy some products listed on the ecommerce company directly from the social media app.

Home Depot gained 0.9% after the U.S. home improvement chain posted a smaller-than-expected decline in quarterly same-store sales.

U.S.-listed shares of China's Tencent Music Entertainment edged up 0.3% as the company beat estimates for third-quarter revenue, helped by steady growth in paid subscriptions on its music streaming platform.

Fisker slid 13.4% after the electric-vehicle startup slashed its 2023 production forecast as it struggles to ramp up deliveries, and flagged weakness in internal controls over financial reporting.