NEW YORK, June 13 (Xinhua) -- U.S. stocks edged higher on Tuesday after May inflation data added to investor optimism that the Federal Reserve will skip a rate hike on Wednesday.

The Dow Jones Industrial Average rose 145.79 points, or 0.43 percent, to 34,212.12. The S&P 500 added 30.08 points, or 0.69 percent, to 4,369.01. The Nasdaq Composite Index increased 111.40 points, or 0.83 percent, to 13,573.32.

Ten of the 11 primary S&P 500 sectors ended in green, with materials and industrials leading the gainers by rising 2.33 percent and 1.16 percent, respectively. Utilities bucked the trend by losing 0.06 percent.

U.S. stocks climbed on Tuesday after new inflation data showed price pressures eased in May, giving the Federal Reserve room to refrain from raising interest rates on Wednesday. The S&P 500 and the Nasdaq Composite notched fresh 13-month highs.

The U.S. consumer price index (CPI) posted year-on-year growth of 4 percent in May, the lowest level since March 2021, according to data issued by the U.S. Bureau of Labor Statistics on Tuesday. The headline inflation gauge showed a month-on-month expansion of 0.1 percent in May, lower than forecast consensus of 0.2 percent and April's 0.4 percent.

The year-on-year growth of core CPI, excluding food and energy items, eased to 5.3 percent in May from 5.5 percent in the previous month, according to the U.S. Bureau of Labor Statistics. Meanwhile, the core CPI recorded a 0.4 percent month-on-month growth for the third consecutive month in May.

A cooling inflation report is fueling this bull market as the Fed should have no problem skipping a rate hike on Wednesday. Wall Street is becoming a little bit hopeful here that a Fed June skip could eventually become a July pause, said Edward Moya, senior market analyst at OANDA, a supplier of online multi-asset trading services.

"A June hold is a done deal and the July FOMC (Federal Open Market Committee) decision should be a coin flip as the disinflation process will likely continue, but signs of stickiness remain," said Moya.

The FOMC has around 95 percent probability of pausing rate hikes in the ongoing monetary policy meeting starting Tuesday, according to data from the CME FedWatch Tool on Tuesday afternoon.

"Our expectation is that the Fed will leave rates unchanged, in line with market pricing. However, we also expect policymakers to send a clear message to markets that at least one more rate hike is likely at a later meeting. Raising the 'dots' for both 2023 and 2024 would signal an intention to leave rates higher for longer, while also giving the doves on the committee another few weeks to prove that inflationary pressures are waning," said a research note published by UBS Wealth Management USA on Tuesday.

Meanwhile, big tech continued to lead the way on Tuesday as easing inflation numbers boosted optimism for the sector. Shares of streaming giant Netflix climbed 2.77 percent. Nvidia stock gained 3.9 percent to finish with a market capitalization of 1.01 trillion U.S. dollars, while Tesla extended its record win streak to 13 days.

For most of the past two months, sentiment has remained somewhat pessimistic, which is part of the reason why the average stock hasn't done very well. But sentiment has turned outright bullish in the past week, noted Mike Wilson, Morgan Stanley's chief U.S. equity strategist.

"Furthermore, it's not just sentiment, as both retail and institutional flows have returned to the equity markets with technology and artificial intelligence the dominant themes," said Wilson.