The Dow was up nearly 200 points, or 0.6%, in midday trading. The S&P 500 and Nasdaq rose 1.4% and 2.4% as well. Investors are hoping that the cooling inflation pressures will lead the Federal Reserve to raise interest rates by smaller amounts in the next few months, following four consecutive historically large hikes.

Solid earnings from retail giant Walmart (WMT) , one of the 30 components in the Dow, also helped boost market sentiment. Walmart (WMT) stock was up 7%.

Tech stocks also got a lift from the surprise news that Warren Buffett’s Berkshire Hathaway (BRKB) bought a stake in chip giant Taiwan Semiconductor during the third quarter.

Shares of Taiwan Semi (TSM) skyrocketed more than 12%. The benchmark Philadelphia Semiconductor Index (SOX) , which has Taiwan Semi (TSM) , Intel (INTC) , AMD (AMD) , Nvidia (NVDA) and other chip leaders in it, was up 4%.

But it’s the good news on the inflation front that is giving investors the biggest cause for jubilation. Traders are now betting that it’s almost a slam dunk that the Federal Reserve will raise rates by only a half-percentage point, instead of three-quarters of a point, at its next meeting on December 14.Traders are pricing in an 85% chance of only a so-called 50 basis point increase at that meeting, compared to a less than 30% probability a month ago, according to federal funds futures on the CME.

In addition to the more benign inflation numbers, investors also seem to be taking solace from comments made by Fed vice chair Lael Brainard on Monday.