Stocks closed higher on Wall Street Wednesday after the latest report of surging prices appeared to keep the Federal Reserve on track to raise interest rates later this year. The S&P 500 rose 0.3%, the Dow Jones Industrial Average rose 0.1% and the Nasdaq rose 0.2%. Technology stocks led the market higher. Inflation jumped 7% last month, its fastest year-over-year pace in nearly four decades, but in line with economists’ forecasts. Fed Chair Jerome Powell told Congress Tuesday the Fed stands ready to raise rates to fight inflation. The yield on the 10-year Treasury note edged down to 1.73%.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

Stocks eased off of early gains, but still edged higher in afternoon trading on Wall Street Wednesday after the latest report of surging prices appeared to keep the Federal Reserve on track to raise interest rates later this year.

The S&P 500 rose 0.3% as of 2:23 p.m. Eastern. The Dow Jones Industrial Average rose 5 points, or less than 0.1%, to 36,258 and the Nasdaq rose 0.4%.

The modest gains were led by technology stocks, which have been choppy as investors shift money in anticipation of higher interest rates that tend to make the pricey sector less attractive. Microsoft rose 1.3% and chipmaker Nvidia rose 0.8%.

A mix of retailers and other companies that rely on direct consumer spending, such as auto companies, also made solid gains. Nike rose 1%.

Health care companies fell. Biogen slid 7.2% for the biggest drop in the S&P 500 on news that Medicare is limiting coverage of the biopharmaceutical company’s $28,000-a-year Alzheimer’s drug whose benefits have been widely questioned.

Bond yields were mostly stable. The yield on the 10-year Treasury fell to 1.73% from 1.74% late Tuesday.

Wall Street has been closely watching rising inflation to gauge the impact on businesses and consumers, as well as on the Fed’s plan to trim its support for the economy and markets.

The Labor Department on Wednesday said consumer prices jumped 7% last month, its fastest year-over-year pace in nearly four decades, but in line with economists’ forecasts. The sharp rise comes a day after Fed Chair Jerome Powell told Congress that the central bank stands ready to raise rates to fight inflation.

The central bank is trimming bond purchases that helped keep interest rates low throughout the virus pandemic. Investors are closely watching to see just how soon the Fed will start raising interest rates to fight inflation.

“We’re in a period where I don’t think we’ve ever been before with the amount of stimulus that was put to work,” said Greg Marcus, managing director of UBS Private Wealth Management. “You can’t have that much of an increase without having inflation ticking up.”

The market now puts the chances of the Fed raising short-term rates by at least a quarter point in March at around 75%. A month ago, it was about 36%.

Wall Street will get another update on rising inflation on Thursday, when the Labor Department releases December results from an index based on U.S. wholesale prices, which shows how inflation is affecting costs for businesses.

Businesses in a wide range of industries have been passing higher costs off to consumers, but many have been warning that they will still feel a financial impact because of higher prices and supply chain problems.

Medical products maker Cardinal Health was the latest to issue such a warning earlier this week.

Wall Street will be closely watching the latest round of earnings to see how companies are dealing with inflation. Several airlines and banks this week will be among the first big companies to report their latest financial results.

Delta Air Lines reports its results on Thursday. Citigroup, JPMorgan Chase and Wells Fargo report results on Friday.