Stocks rose Tuesday as market participants were encouraged by easing price pressures in May, boosting sentiment that the Federal Reserve will not raise interest rates in its next decision on Wednesday. The Dow Jones Industrial Average climbed over 140 points, while the S&P 500 and Nasdaq Composite rose to their highest closes since April.

Here's how the market settled on Tuesday:

S&P 500 Index (SPY  ): +0.69% or +30.08 points to 4,369.01

Dow Jones Industrial Average (DIA  ): +0.43% or +145.79 points to 34,212.12

Nasdaq Composite Index (QQQ  ): +0.83% or +111.40 points to 13,573.32

A key inflation report on Tuesday showed that the consumer price index rose 4% annually in May, marking the slowest year-over-year rate since March 2021. Beneath the headline, CPI rose 0.1% month-to-month, while core CPI -- which strips more volatile food and energy prices -- rose 0.4% on the month and 5.3% over a year ago, signaling eashing price pressures.

Following the report, traders increased bets that the central bank will maintain interest rates at their current target of 5% to 5.25% on Wednesday, ending 10 straight rate hikes in effort to cool decades high inflationary pressures. Investors are pricing a 99% chance the Fed will pause rates, according to CME Group's FedWatch tool.

Elsewhere, AMD (AMD  ) announced its most-advanced GPU for artificial intelligence, the M1300X, will begin shipping to consumers later this year. This chip represents the strongest challenge to Nvidia (NVDA  ) -- which dominates the AI chip market with an estimated 80% market share.

AMD CEO Lisa Su told investors in San Francisco on Tuesday that AI is the company's "largest and most strategic long-term growth opportunity," forecasting that the data center AI market will grow from an estimated $30 billion this year to "over $150 billion in 2027."

Netflix (NFLX  ) rose higher after Bank of America boosted its price target, citing the streaming giant's positive subscription momentum following its password sharing crackdown. Analyst Jessica Reif Eric raised the firm's price target to $490 per share from $410, representing about 15% upside from current trading levels.

"We estimate password sharing could represent a $2 [billion] incremental annualized [revenue] opportunity," Ehrlic wrote in a note to clients, adding that Netflix's ad-supported tier will also serve as another viable revenue driver.

Looking ahead, market participants will pay close attention to the Fed's latest policy decision due out Wednesday afternoon, as well as remarks from Fed Chair Jerome Powell following the decision.