Stocks on Wall Street pushed further into bull market territory in early trading on Tuesday, climbing after new data showed inflation continues to slow.

The Consumer Price Index for May was initially read by investors as moderate enough to ensure the Federal Reserve will hold off on another interest rate increase this week. The central bank will announce a decision on Wednesday.

The S&P 500-stock index rose 0.6 percent in early morning trading to its highest level since January of 2022, extending a strong rally since the index fell to a low point in October. The S&P 500 has climbed more than 20 percent from that 2022 low, a gain that by many definitions breaches the threshold for a bull market, a marker of a new phase of exuberance in the markets.

Slowing inflation is seen by investors and economists as limiting the need for the Federal Reserve to keep increasing interest rates, which have raised borrowing costs for consumers and companies and weighed on the broader stock market. Some policymakers had already suggested the Fed might not raise rates again this month, and after the latest inflation data, the likelihood of an increase was close to wiped out.

Not all investors agree on the best way to define a bull market, especially when concerns over the longer-term trajectory of the U.S. economy remain. The S&P 500 is still roughly 9 percent off its record high, reached at the start of 2022, just before fears of rising interest rates in response to accelerating inflation set in and dragged the index to a loss of around 20 percent.

“With inflation stubbornly high, we do see the business cycle eventually ending in recession,” noted Alexandra Wilson-Elizondo, deputy chief investment officer of multi-asset solutions at Goldman Sachs Asset Management.

Investor exuberance is nonetheless spreading. The Russell 2000 index, which tracks smaller companies in the United States that are more exposed to the domestic economy, has rallied more than 8 percent this month, and jumped more than 1 percent in response to the inflation report.

The index had trended sideways for much of the year, and even after its rally, it remains less than 15 percent above a low reached 12 months ago.

However, the Russell 2000’s recent rise is still indicative of the rally taking hold across the stock market as inflation cools and the economy has remained resilient to the potentially damaging effects higher interest rates can bring.

“We are just over two weeks away from the beginning of the third quarter. This is meaningful because to start the year there was a near consensus view that this is when the recession would begin,” said Ms. Wilson-Elizondo. “Today, the recession has not arrived.”

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