U.S. inflation ticked higher in October, but stable core price pressures and tame month-on-month gains prompted a sigh of relief on Wall Street and likely supported bets for an end-of-year interest rate cut from the Federal Reserve.

Forecasters had expected lingering inflation in October. How will the new numbers affect the next Federal Reserve decision on interest rates?

The Consumer Price Index rose 2.6% versus a year ago in October — falling in line with expectations, the Labor Department said on Wednesday.

Traders of contracts that settle to the Federal Reserve's policy rate moved Wednesday to price in a firmer chance of another quarter-point interest-rate cut at the central bank's meeting next month, after a government report showed consumer inflation rose in October in line with economist expectations.

Last month, we were impressed with a very strong jobs report for September that called into question whether or not the labor market was really declining, as seemed

The Consumer Price Index rose 2.6% in the 12 months through October — a tick up from the prior month — while the measure that strips out food and energy held at 3.3%, the Labor Department said on Wednesday.

The 10-year Treasury yield fell on Wednesday as investors looked to key inflation readings and other economic data due later this week.