Stocks climbed higher on Wednesday as market participants grew more confident that inflation may be cooling ahead of Thursday's consumer price index (CPI) report. The Dow Jones Industrial Average rose over 265 points, while the S&P 500 Index and Nasdaq Composite gained about 1.3% and 1.8%, respectively.

Here's how the market settled on Wednesday:

S&P 500 Index (SPY  ): +1.28% or +50.36 points to 3,969.61

Dow Jones Industrial Average (DIA  ): +0.80% or +268.91 points to 33,973.01

Nasdaq Composite Index (QQQ  ): +1.76% or +189.04 points to 10,931.67

Driving most of the market moves on Wednesday, economists expect Thursday's CPI report to show prices cooling by a modest 0.1% in December over the prior month. However, economists forecast for a 6.5% increase from the prior year. Economists also expect Core CPI, which excludes food and energy prices, to rise 0.3% in December and 5.7% higher on an annual basis.

Wednesday brought the first four-day rally for the Nasdaq since September, with the index climbing this week as investors picked up technology stocks as they expect the Federal Reserve to soon ease its rate-hiking campaign in response to cooling inflation.

Beyond the highly anticipated CPI report, Wednesday was a big day for meme stocks, with retailer Bed Bath & Beyond (BBBY  ) jumping another 68% after rising more than 50% across the prior two sessions. GameStop (GME  ) and AMC Entertainment (AMC  ) also rose more than 7% and 21%, respectively.

Shares of Party City (PRTY  ) dropped nearly 39% after spiking 118% on Tuesday. Bloomberg News reported on Tuesday that the retailer has sought funding for a potential Chapter 11 bankruptcy, citing people with knowledge of the matter.

Elsewhere, Wells Fargo (WFC  ) was in the spotlight after the lender announced it was shrinking its mortgage business as it shifts focus in response to regulatory pressure and the impact of higher rates on housing. The bank will now limit home loans to existing customers and borrowers from minority communities.

Beyond Thursday's CPI report, market participants will react to the start of the new earnings season on Friday, with JPMorgan Chase (JPM  ), Bank of America (BAC  ), Citigroup (C  ), Delta Air Lines (DAL  ), BlackRock (BLK  ), and Wells Fargo set to deliver results.