• Stock prices recovered following encouraging inflation news.
• Starbucks replaces its chairman with the CEO of Chipotle.
• Google has announced new phones and AI features.

Here are five important things investors need to know at the start of the trading day:

1. Rally time

Stocks rallied on Tuesday, led by encouraging inflation news (more on that below). The Nasdaq Composite rose 2.43% and the S&P 500 rose 1.68%. Meanwhile, the Dow Jones Industrial Average ended the day up 408 points, or 1.04%. The S&P 500 has recouped some of its recent losses and is now less than 5% below its July record high. In fact, all three major averages are back above their August 2 closing levels, where they were before the dramatic global market sell-off on August 5. Volatility has also eased since then, with the CBOE Volatility Index (VIX) below 20 on Tuesday after rising above 65 last week. Follow live market updates.

2. Freshly brewed

Starbucks shares took a jolt on Tuesday, rising nearly 25% after the company announced that CEO Laxman Narasimhan is leaving the company and Chipotle CEO Brian Niccol will take the top job. It was the stock’s best day ever. Narasimhan, who became CEO in March 2023, left his position effective immediately; Niccol will start on Sept. 9. The coffee giant has struggled with weak sales in the U.S. and China this year. Chipotle shares, meanwhile, fell over 10% on news that Niccol would leave the company after a successful tenure leading the burrito chain through a food scandal and the pandemic.

3. One done, one still to do

The producer price index released Tuesday showed that wholesale inflation rose less than expected in July. The core PPI reading, which strips out the volatile food and energy components, was unchanged. Dow Jones consensus estimates had called for a 0.2% increase for both readings. The headline PPI rose 2.2% year over year, down sharply from June’s 2.7% reading. Investors will now turn their attention to the July consumer price index report, due at 8:30 a.m. ET on Wednesday. Economists surveyed by Dow Jones expect a similar 0.2% increase for the all-item CPI reading as well as the core reading. A positive CPI reading could ease some of the pressure on the Federal Reserve and allow the central bank to focus on other economic challenges, such as the weakening labor market.

4. Twin Season

Google on Tuesday unveiled new artificial intelligence features that leverage the company’s Gemini AI assistant and will be available on its Android devices. The tech giant also announced the latest line of its Pixel phones. The Pixel 9 series, which starts at $799, will have a brighter screen for viewing in direct sunlight, as well as more memory to support the AI ​​features. Google also announced the Pixel Watch 3, which has new features including AI-powered workout recommendations. Google, which doesn’t make much money from its hardware business, wants to get its new AI in front of consumers before Apple introduces its AI to iPhones, Macs and iPads later this year.

5. Time window

Mortgage rates have dropped dramatically in recent weeks, and now homeowners are reaping the benefits. The Mortgage Bankers Association’s seasonally adjusted index showed that applications to refinance a home rose 35% last week compared to the previous week. Compared to the same week a year ago, they’re up 118%. It took a while for homeowners to notice. Rates fell just 1 basis point last week, but over the past four weeks they’ve fallen 33 basis points, and are 62 basis points lower than the same week a year ago. Refinances as a share of mortgage activity have risen to 48.6% of all applications from 41.7% the previous week, as homebuyers still face high home prices and low supply.

— CNBC’s Brian Evans, Jesse Pound, Amelia Lucas, Rohan Goswami, Jeff Cox, Jennifer Elias and Diana Olick contributed to this report.