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STORY: Wall Street rallied on Wednesday, with the Nasdaq surging nearly 3%, as the index climbed out of a bear market after having risen more than 20% off its lows in May.

It was a banner day for the other two major indexes, as the Dow rose more than a percent and a half and the S&P 500 ended more than 2 percent higher.

Data released Wednesday showed the consumer price index (CPI) - which measures U.S. inflation at the retail level - slowed more than expected in July, raising hopes that the Federal Reserve will become less aggressive on interest rates hikes.

Loreen Gilbert is CEO of WealthWise Financial.

"The markets are responding to the CPI number that came down. And while it's not down where it needs to be, the market is responding because inflation has peaked and it's coming down. Not only has the CPI number come down, but we're also seeing that consumer expectations of inflation are also coming down. And that's very important because consumer expectations can create the inflation to continue to spiral. But looking at those numbers that came out this week, the three year number has come down significantly to 3.2%. And that's very encouraging that we're seeing those numbers come down to more levels, the normalized numbers."

High-growth and mega-cap tech stocks, whose valuations are vulnerable to rising bond yields, surged as Treasury yields fell sharply across the board.

Semiconductor stocks also rebounded after a punishing start to the week after Nvidia and Micron Technologies warned of cooling demand for chips.

Shares of Meta Platforms soared after the Facebook-parent said it had raised $10 billion in its first-ever bond offering.

And Tesla rose nearly 4% after Elon Musk said he sold $6.9 billion worth of shares in the electric car company to finance a potential deal for Twitter if he loses a legal battle with the social media platform, shares of which also posted a solid gain.