The stock market’s fear gauge is sinking to 4-month lows as risk appetite grows after inflation cooled in July

A cooldown in consumer price inflation in July ignited risk appetite among stock investors Wednesday, driving down the market’s so-called fear gauge to its lowest in months.

The Cboe Volatility Index, better known as VIX, fell as much as 9.1% to 19.79, the weakest level since April 20. The index slightly pared its loss to 8.9% during afternoon trade. The move coincided with a surge in US stocks after the US government outlined a cooling in headline inflation to 8.5% in July, a still-scorching rate but better than had been anticipated.