5 things to know before the stock market opens Wednesday

• Stocks rallied after encouraging inflation news.
• Starbucks is replacing its chief executive with Chipotle's CEO.
• Google announced new phones and AI features.

Here are five key things investors need to know to start the trading day:

1. Rally time

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

2. Fresh brew

Starbucks shares got a jolt Tuesday, soaring nearly 25% after the company announced that CEO Laxman Narasimhan was leaving and Chipotle CEO Brian Niccol would take over the top job. That was the best day ever for the stock. Narasimhan, who became CEO in March 2023, left the role effective immediately; Niccol will start on Sept. 9. The coffee giant has seen its performance struggle this year with weak sales in the U.S. and China. Chipotle's stock, meanwhile, fell over 10% on the news that Niccol would leave after a successful tenure leading the burrito chain through a foodborne illness scandal and the pandemic.

3. One down, one to go

The producer price index released Tuesday showed wholesale inflation rose less than expected in July. The core PPI reading, which leaves out volatile food and energy components, was flat. Dow Jones consensus estimates had expected increases of 0.2% for both readings. The headline PPI increased 2.2% on a year-over-year basis, which was a significant drop from June's 2.7% reading. Investors will now turn their attention to July's consumer price index report, which will be released Wednesday at 8:30 a.m. ET. Economists surveyed by Dow Jones are expecting a similar 0.2% increase for the CPI's all-items reading, as well as the core measurement. A positive CPI reading could ease some pressure on the Federal Reserve and allow the central bank to focus on other economic challenges, such as the slowing labor market.

4. Gemini season

Google on Tuesday unveiled new artificial intelligence features that will use the company's Gemini AI assistant and 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 announced the Pixel Watch 3 as well, which has new features including AI-powered workout recommendations. Google, which doesn't make a lot of money from its hardware business, is aiming to get its new AI in front of consumers before Apple, launches its AI on iPhones, Macs and iPads later this year.

5. Window of opportunity

Mortgage rates have dropped dramatically in the past few weeks, and now homeowners are taking advantage of it. The Mortgage Bankers Association's seasonally adjusted index showed that applications to refinance a home soared 35% last week, compared with the previous week. They were up 118% when compared with the same week one year ago. It's taken some time for homeowners to notice. Rates only dropped 1 basis point last week, but they have fallen 33 basis points in the past four weeks and are 62 basis points lower than the same week a year ago. The refinance share of mortgage activity increased to 48.6% of total applications, up from 41.7% in the previous week, as homebuyers are still facing 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.