What happened 

Shares of the online car marketplace Carvana (CVNA -0.36%) spiked today on no company-specific news. Instead, investors were likely pushing the stock higher after the latest inflation data was better than expected. 

Investors are likely hoping that with inflation somewhat cooling, the Federal Reserve may be more inclined to ease off of its aggressive interest rate hikes. Carvana's share price was up by 32.2% as of 2:19 p.m. ET. 

So what 

The Consumer Price Index (CPI) increased 0.4% in October and 7.7% from a year ago. That was better than economists' estimate of an increase of 0.6% during the month and 7.9% for the year.

The positive inflation report sent stocks across nearly all sectors soaring today, pushing the S&P 500 up 4.6% and the tech-heavy Nasdaq Composite higher by 6.2% mid-afternoon. 

Carvana's share price surged right along with the rest of the market, potentially for two reasons. The first is that Carvana's shares are heavily shorted with more than 30% of available shares sold short. 

The positive sentiment in the market gave Carvana's stock a lift, which in turn likely spurred short-sellers to buy some of the stock to cover their short positions. 

The second is that some Carvana shareholders may also be optimistic that the latest inflation data could encourage the Federal Reserve to slow down the pace, or at least severity, of its interest rate hikes. 

The Fed's rate hikes have resulted in higher borrowing costs for consumers, which usually results in consumers curbing their spending on expensive items like vehicles. 

Now what 

Carvana investors may want to keep today's share price pop in perspective. First, there's no guarantee that the Fed will ease off of its monetary policy just because of today's inflation report. 

Inflation is still at nearly four-decade high, and it's going to take more time and more increases to the federal funds rate to bring it back down. 

Second, Carvana's shares are still down 97% over the past 12 months, so today's gains probably aren't all that impressive to shareholders who've been holding the stock for a while. 

Making matters worse, the company reported worse-than-expected third-quarter results just last week and some analysts are worried about the company's underlying business.