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US stocks mostly rose on Tuesday after the latest consumer inflation report revealed easing prices in April amid continued euphoria over the US-China trade truce.
The S&P 500 (^GSPC) rose 0.9%, on pace to close positive for the year after the broad benchmark's 3.3% surge on Monday. The tech-heavy Nasdaq Composite (^IXIC) pushed up 1.6% after entering a new bull market in the prior session.
The Dow Jones Industrial Average (^DJI) slid 0.3%, weighed down by a sharp fall in shares of key component UnitedHealth (UNH).
April's Consumer Price Index, released on Tuesday morning, showed the slowest annual rate of inflation since 2021, with no signs of immediate price hikes after the whipsawing of President Trump's tariffs throughout the month.
While the brunt of the tariffs' impact likely won't be seen for some time, bond traders are watching the consumer inflation print for clues to the Federal Reserve's path for interest rates. Markets are pricing in the first 0.25% rate cut in September, compared with previous expectations for June.
Read more: The latest on Trump's tariffs
Major companies are still bracing for a tariff bruising. Honda (HMC, 7267.T) on Tuesday became the latest automaker to put out a warning, saying it expects a $3 billion hit to full-year profit from Trump's new auto duties.
Elsewhere in corporates, UnitedHealth suspended its 2025 guidance as its CEO, Andrew Witty, stepped down immediately in a surprise move. It shares sank around 10%, with stocks of other healthcare companies such as Humana (HUM) also sliding after UnitedHealth flagged rising costs as a key factor.
LIVE 14 updates
Fed still likely to play 'wait and see' on rates amid tariff inflation uncertainty
Yahoo Finance's Jennifer Schonberger reports:
The Federal Reserve is likely to keep interest rates on hold in the near term following another inflation reading that didn't make things any easier for the central bank.
A new look at the Consumer Price Index (CPI) for April showed that prices remained sticky despite some signs of cooling, adding to the uncertainty surrounding the inflation outlook.
Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management, said the report didn't appear to capture the full impact of President Trump's tariffs yet.
Read more here.
S&P 500 turns positive for year, on pace to erase year-to-date losses
The S&P 500 (^GSPC) rose 0.8% on Tuesday, turning positive for the year after erasing all of its losses as a global tariff war appeared to ease.
As of 10:20 a.m. ET, the broad-based index was up 0.1% since the start of 2025 in a stunning rally from its April 9 lows.
The S&P 500 dropped sharply in the days following President Trump's tariff policy on April 2, "Liberation Day." It has clawed back those losses amid tariff pauses, a deal with the UK, and a trade breakthrough with China.
On Tuesday, the S&P 500 was looking to add to Monday's gain of nearly 3.3% after the US struck an agreement with China, pausing some tariffs against Chinese imports, with both sides agreeing to significantly reduce their duties.
Meanwhile, the Nasdaq Composite (^IXIC) and the Nasdaq 100 (^NDX) entered a new bull market on Monday, up 20% from their April lows.
UnitedHealth drops 12% on guidance pull, CEO change
UnitedHealth (UNH) stock dropped more than 12% on Tuesday morning, dragging on the Dow Jones Industrial Average (^DJI) and other healthcare stocks.
The healthcare provider suspended its 2025 forecast just weeks after cutting its outlook, citing increased costs.
The company also announced CEO Andrew Witty would step down immediately for "personal reasons."
Shares are down 34% year to date. The stock, a heavyweight component on the Dow, was causing the blue chip index to drop on Tuesday.
Other healthcare names were also down on Tuesday, including Humana (HUM) and CVS (CVS).
Stocks mixed as CPI print shows easing inflation pressures in April
Stocks were mixed on Tuesday after the latest Consumer Price Index report showed inflation pressures eased in the month that many of President Trump's tariffs were unveiled.
The Dow Jones Industrial Average (^DJI) slid 0.4%, dragged by a sharp drop in shares of UnitedHealth (UNH) due to a CEO change and guidance withdrawal.
Meanwhile, S&P 500 (^GSPC) opened just above the flat line, after the broad benchmark surged almost 3.3% on Monday as investors celebrated the tariff reduction deal. The tech-heavy Nasdaq Composite (NQ=F) pushed up 0.2%.
The Trump administration's tariff policy revealed last month appeared to have no immediate impact on April's monthly inflation print released before the bell. The Bureau of Labor Statistics' Consumer Price Index showed the slowest annual rate of inflation since 2021.
Nvidia poised to rejoin $3 trillion club
Nvidia was set to rejoin the $3 trillion club Tuesday.
The stock gained 5.4% to start the week, putting its market capitalization nose hairs behind $3 trillion — the AI chipmaker's value was $2.9997 trillion as of Monday’s close, to be exact, according to Bloomberg data.
That gain was part of a larger surge in the so-called "Magnificent Seven" Big Tech stocks after the Trump administration temporarily slashed tariffs on Chinese imports to 30% from as high as 145% for 90 days, signaling a deescalation in the mounting US-China trade war.
Nvidia shares jumped an additional 1.5% premarket Tuesday, putting the company on track to close above the $3 trillion mark for the first time since Feb. 28.
Consumer Prices rise at slowest annual pace since February 2021
April's Consumer Price Index (CPI) report showed inflation pressures eased in the first month that many of President Trump's tariffs were in effect.
The latest data from the Bureau of Labor Statistics showed that consumer prices increased 2.3% over the prior year in April, a slowdown from March's 2.4% and below economists' forecast for 2.4%. This marked the lowest annual increase since February 2021, before a large increase in inflation sparked a Federal Reserve interest rate hiking cycle.
On a month-over-month basis, prices increased 0.2%, above the 0.1% decrease seen in March but lower than the 0.3% estimated by economists.
On a "core" basis, which strips out the more volatile costs of food and gas, prices in April climbed 0.2% over the prior month, ahead of March's 0.1% rise but below consensus projections for a 0.3% increase. Over the last year, core prices rose 2.8%, unchanged from the prior month and in line with Wall Street's expectations.
The CPI report greets investors less than 24 hours after markets soared on news that the US and China have placed a 90-day pause on a wide swath of tariffs between the two countries.
Will Big Tech's post-pause rally withstand any weakness in economic data?
After yesterday's US-China tariff pause, tech stocks lurched higher once again, adding to an uneven post-"Liberation Day" rally that has stood out in markets.
This morning, the Big Tech names were mixed in premarket trading. Tesla (TSLA), which rose over 6% yesterday, is up only 0.3%. Apple (AAPL), which gained by the same amount, is down some.
With the release of the April Consumer Price Index this morning, investors will find out whether tariffs continue to be the only narrative that matters right now.
As my colleague Josh Schafer pointed out in today's Chart of the Day, some strategists don't see that changing:
Stocks moving in premarket trade: UnitedHealth, Coinbase, Hertz, Honda
Here are some stocks making moves on Tuesday morning, two hours ahead of the opening bell. You can find more movers on our trending tickers page.
UnitedHealth (HMC): The healthcare provider suspended its 2025 forecast just weeks after cutting its outlook, citing increased costs. It also said its CEO Andrew Whitty would step down immediately. Its shares sank over 10%, dragging on other healthcare stocks including Humana (HUM) and CVS (CVS).
Coinbase (COIN): Shares in the crypto exchange provider surged over 9% on news it will join the S&P 500 on May 19, a landmark for the industry. Coinbase will replace Discover Financial Services (DFS) on the broad benchmark.
Hertz (HTZ): The rental car company's stock dropped nearly 7% in the wake of a deeper-than-expected first quarter loss. Hertz also flagged weaker demand amid a broader downbeat forecasts for US tourism.
Honda (HMC): The Japanese auto giant said it expects a $3 billion hit to annual profit due to US tariffs on cars and car part imports. Its US-listed shares fell 4%.
Good morning. Here's what's happening today.
Goldman lifts S&P 500 targets with caution on market optimism
Goldman Sachs (GS) strategists say the outlook for US equities is brightening as US-China trade tensions ease, but caution that prices may be overly optimistic due to ongoing uncertainties.
Bloomberg News reports:
And the BofA fund manager survey says...
This report is always a fun one to dissect.
The latest Bank of America fund manager survey was done just before the new US-China trade deal. But it still offers a valuable snapshot into investor thinking.
Fund managers were positioned defensively enough that the "pain trade" could continue in the near term. That essentially means investors were underweight risk assets (or owned less of them), and may now be forced to chase stocks higher due to a sliver of good trade news.
Meanwhile, I thought the below chart was interesting, as Goldman Sachs lowered its US recession probability to 35% from 45% late Monday.
April CPI print expected to show first signs of Trump tariffs' impact on inflation
China stocks slide as trade pact undermines stimulus hopes
Chinese stocks struggled on Tuesday as optimism over the US-China rollback of tariffs was clouded by worries that Beijing will now pull back on measures to stimulate the economy.
The Hang Seng China Enterprises Index (^HSCE) in Hong Kong ended 2% lower, coming off the prior day's 3% relief rally. Shanghai's onshore benchmark CSI 300 Index (000300.SS) closed 0.2% higher.
Bloomberg reports:
Gold holds after significant drop
Gold (GC=F) maintains its loss as the easing of US-China trade tensions has pushed investors out of the safe-haven and into riskier assets.
Bloomberg reports:
