A U.S. report suggesting the U.S. Federal Reserve won’t have to move interest rates as much as feared at the end of the month buoyed stock markets Tuesday morning.

At midday, Toronto’s S&P/TSX composite index was up 69.16 points or 0.83% at 8361.47 after losing 74.32 points Monday. The junior TSX Venture Exchange lost 6.83 or 0.45% to 1520.57. All sectors were ahead or unchanged.

On Wall Street, the Dow industrials moved 75.65 points or 0.73% higher at 10410.38 after moving down 75.37 points Monday. The Nasdaq was up 29 points or 1.47% to 1999.01 after losing 29.88 points the day before while the S&P 500 index edged up 10.07 or 0.89% to 1135.36.

Meanwhile, the Canadian dollar was up 0.05 of a cent at US72.81¢ even as Statistics Canada reported that Canadian manufacturers continued a “stellar” performance in April, with shipments rising 0.5% to $48.5 billion in the fifth straight monthly gain. That’s the longest string of monthly increases in factory activity since the late 1990s.

For the markets, the good news came from a report on the U.S. consumer price index, which showed an increase of 0.6% in May, the largest increase in more than three years as prices for food and energy climbed. But the “core” rate, which excludes volatile energy and food prices, rose only 0.2% last month; that was what economists ha expected and raised hopes the Fed will raise interest rates by just a quarter-point at the end of the month.

Markets have been on edge lately over fears that a stronger inflation report would persuade the Fed to boost rates by a half-point.

The next Fed meeting is set for June 29 and 30. The Bank of Canada will make its next scheduled announcement on interest rates July 20.

More good news came in a report about consumer confidence in the U.S. The University of Michigan’s preliminary consumer confidence survey index for June came in at 95.2, much better than the 90.8 reading that had been expected.

Overseas, Asian stock markets closed mixed, with prices falling in Tokyo and Hong Kong.

Tokyo’s Nikkei Stock Average of 225 stocks fell 103.96 points or 0.9% at 11,387.7. Wall Street’s overnight fall dampened the Tokyo market’s mood at the opening, and trading remained restrained throughout the day.

In Hong Kong, the key Hang Seng Index slipped 25.88 points or 0.21%, to 12050.69. Brokers said prices fell on continued worries that China and the United States would raise interest rates to curb inflation in those two countries.

London’s FTSE 100 index rose 18.8 points or 0.42% at 4,452.

Frankfurt’s DAX 30 headed 0.57% higher while the Paris CAC 40 ran up 0.73%.