Shares of publicly traded Bitcoin (BTC) miners surged on Jan. 9 as traders piled into equity markets amid growing bets that the United States Federal Reserve would soon be able to relax its aggressive fight against inflation. 

Bitcoin miners Riot Blockchain (RIOT), Hut8 (HUT), Bitfarms (BITF), Marathon Digital Holdings (MARA) and others posted double-digit percentage gains in intraday trading. 

The rally coincided with a broad uptick in equity markets, with the large-cap S&P 500 Index rising 1% and the technology-focused Nasdaq climbing 2% before paring gains.

Markets rallied ahead of an eagerly awaited U.S. consumer price index report later this week that’s expected to show a continued moderation in cost pressures. On Jan. 7, data from the Labor Department showed that job creation and wage growth softened in December, suggesting that the Federal Reserve’s rate-hike campaign was having its desired effects.

According to Bloomberg, swap contracts showed traders now expect the Fed funds effective rate to peak below 5%, down from 5.06% after Friday’s nonfarm payrolls report. Fed Fund futures prices, meanwhile, suggest that traders are expecting less aggressive rate hikes in the months ahead.

Related: BTC price 3-week highs greet US CPI — 5 things to know in Bitcoin this week

In addition to broadly favorable market conditions, the rally in Bitcoin mining stocks may also be attributable to short covering in a market with low liquidity. Short covering is often responsible for the initial stages of a rally as traders square their positions by buying an asset after shorting it earlier.

With Bitcoin’s price falling 75% peak-to-trough and several crypto firms going bankrupt, contagion has finally begun to spread to the mining sector. In December, Core Scientific, one of the largest BTC miners by computing power, filed for Chapter 11 bankruptcy in Texas. The same month, mining company Greenridge received a $74 million restructuring lifeline from New York Digital Investment Group.