"It's the economy, stupid," is a maxim of long-standing in the political world. It's also front of mind for many investors in real estate investment trusts (REITs), as evidenced by the dramatic upswings of many stocks in the sector on Tuesday. There was some highly encouraging news about inflation, and the market reacted accordingly and strongly.

Many REITs booked notable gains on the day, no matter what niche or niches they specialize in. Realty Income (NYSE: O) closed nearly 5% higher in price, while American Tower (NYSE: AMT) and Sun Communities (NYSE: SUI) both rose by nearly 6%. Stag Industrial (NYSE: STAG) and W.P. Carey (NYSE: WPC) moved higher by 4.6% and 3.3%, respectively.

There was little consequential news from any of those five REITs (or any prominent company in the sector, come to think of it). Rather, the bullishness was due to the latest inflation data from the federal government's Labor Department.

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Source Fool.com