On Tuesday, US bank shares experienced an increase following the release of inflation data, which supported the expectation that the Federal Reserve would maintain interest rates unchanged on Wednesday. The data also suggested that the central bank would keep the option open for future rate hikes, enhancing bank interest income.

In May, consumer prices in the United States saw minimal growth, and the annual inflation rate recorded the smallest increase in over two years. However, it is important to note that underlying price pressures remained robust.

The data lifted the S&P 500 Banks Index 1.5%, while the KBW Regional Banking Index gained about 1.6%.

The S&P 500 Banks Index is up 5.4% this month through Monday’s close.

The banking sector has benefited from the rise in net interest income, which has helped offset the slump in market-sensitive business units like investment banking and trading.

On Tuesday, Wells Fargo (NYSE:WFC) CFO Mike Santomassimo said the lender expected an upside to interest income this year.

JPMorgan Chase (NYSE:JPM), Wells Fargo, Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS), Citigroup (NYSE:C) and Bank of America (NYSE:BAC) advanced between 1% and 2.7%.

Regional lenders also rose. PacWest Bancorp, Western Alliance (NYSE:WAL), Comerica (NYSE:CMA), U.S. Bancorp, State Street (NYSE:STT) and KeyCorp (NYSE:KEY) gained between 2.5% and 5%.

Missing the rally were shares of Zions Bancorporation (NASDAQ:ZION) after executives said at a conference that interest income at the regional lender was trending toward. Shares were last down 3.1%.