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US stocks paused on a recent rally Wednesday as investors digested a softer-than-expected inflation reading and assessed a US-China plan to salvage their trade truce.
The Dow Jones Industrial Average (^DJI) was flat on the day, while the S&P 500 (^GSPC) slipped just under 0.3%. The tech-heavy Nasdaq Composite (^IXIC) led the declines, falling roughly 0.5%.
Recently, the S&P 500 and Nasdaq have risen to within striking distance of record closing highs amid optimism for potential trade deals.
Before the open, markets gave a muted response to a US-China framework agreement to get the Geneva tariff truce back on track. Trump and other US officials indicated the deal should resolve issues between the two countries on rare earths and magnets. Trump said Wednesday that the US will allow Chinese students in US colleges, a sticking point that had emerged in the weeks following the countries' mid-May deal in Geneva. However, the deal was seen as lacking detail about export curbs and tariff levels.
Read more: The latest on Trump's tariffs
Stocks revived somewhat after a better-than-expected reading of the May Consumer Price Index (CPI) before the bell. Consumer inflation was up 0.1% month over month, Bureau of Labor Statistics data showed, compared with the 0.2% rise expected and the 0.2% increase in April.
On a "core" basis, which excludes volatile food and energy costs, May CPI rose 2.8% year over year, matching April's rate. Monthly core prices increased 0.1%, versus a 0.2% gain the prior month.
The data was in focus ahead of the Federal Reserve's next monetary policy decision on June 18. Odds of a September interest rate cut increased following the release, with markets pricing in a 57.2% chance versus 53.5% a day before, per the CME FedWatch tool. Treasury yields also fell, with the benchmark 10-year yield (^TNX) declining to 4.41%.
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The Dow falls 1 point in quiet day for major indexes
US stocks took a breather on Wednesday as investors digested a softer-than-expected inflation reading and assessed a US-China plan to salvage their trade truce.
The Dow Jones Industrial Average (^DJI) was roughly flat, losing just 1 point on the day, while the S&P 500 (^GSPC) sagged more than 0.3%. The tech-heavy Nasdaq Composite (^IXIC) led the declines, falling almost 0.6%.
Oil jumps 4% on report of threat to US embassy in Iraq
Oil surged more than 4% on Wednesday following a Reuters report that the US embassy in Iraq is preparing for a partial evacuation amid security threats.
The surge came after the report, citing US and Iraqi sources, said employees were preparing for an ordered departure because of heightened risks in the area.
West Texas Intermediate (CL=F) futures gained more than 4% to settle at $68.15 per barrel. Brent crude (BZ=F), the international benchmark, also jumped more than 4% to settle at $69.77 per barrel.
Crude had rallied earlier in the session after President Trump said the US had reached a trade framework deal with China.
Futures also gained after Trump said in an interview he was less confident that Washington would reach a nuclear deal with Iran, a top oil producer.
Bessent, asked about Fed chair job, says 'I would like to stay' Treasury secretary until 2029
Yahoo Finance's Jennifer Schonberger reports:
Treasury Secretary Scott Bessent told lawmakers he would like to remain in his seat until 2029, but he did not dismiss the possibility of becoming the next chair of the Federal Reserve.
He was asked in an appearance before the House Ways and Means Committee if he would rather be Fed chair or Treasury secretary — a possible reference to a media report that his name is now being circulated as a possible replacement for Jerome Powell once Powell’s term as chair of the Fed expires next May.
Bessent said he has "the best job" in Washington and is "happy to do what President Trump wants me to do," while noting that "I would like to stay in my seat through 2029" to help carry out the administration’s agenda.
Trump's posts aren't moving markets as much lately
President Trump's Truth Social posts aren't moving markets like they used to.
At 8:04 a.m. ET Wednesday morning, the President posted on his social media platform, "OUR DEAL WITH CHINA IS DONE, SUBJECT TO FINAL APPROVAL WITH PRESIDENT XI AND ME."
A post like that would've moved markets a month ago as stocks were swinging on any and every Trump update. But on Wednesday, futures tied to the major indexes barely budged after Trump's post.
Instead, stocks found their direction from economic data. At 8:30 a.m. ET a cooler-than-expected reading of consumer prices for May sent futures higher as investors amped up bets that the Federal Reserve could cut interest rates at least twice this year.
This marked the latest sign that markets have moved on from President Trump's trade war dictating every market move. Instead, focus is shifting back to the Federal Reserve and the path of the US economy.
"For some period of time, tariffs were the only thing that mattered," Truist Co-CIO Keith Lerner told Yahoo Finance on Wednesday. "And I think we're finding out today a lot of other factors matter."
And for now, economists argue the economic picture may be improving.
"Combined with the solid May jobs report, the CPI data reduce the chances of a nasty bout of stagflation," Bank of America US economist Stephen Juneau wrote in a note to clients on Wednesday. "That means a lower risk of "bad" cuts (due to a collapse in the labor market) but increased probability of "good" cuts (solid labor market and slowing inflation)."
Egg prices fall again in May as grocery inflation continues to slow
Egg prices fell 2.7% in May to headline a month that saw grocery inflation rise from the prior month but continue to moderate as consumers search for relief from high food prices, which have weighed on household budgets for years.
Food at home prices have now increased by less than 0.5% each month since October 2022.
Wednesday's Consumer Price Index report showed that the index for food at home rose 0.3% last month, a rebound after recording a 0.4% drop in April to mark the largest monthly decline since 2020. May also marked the 27th straight month that inflation for food at home was below inflation for food away from home, per JPMorgan analyst Ken Goldman.
Half of the major grocery store food groups saw an increase in April, and the other half saw a decline, reversing the downturn consumers saw across five categories in the prior month.
Read more here.
How the Trump-Musk feud exposed the risk of the 'Musk premium' in Tesla's stock
Tesla (TSLA) CEO Elon Musk's recent feud with his former ally President Trump put the spotlight on the risk of the electric vehicle stock's "Musk premium."
Wall Street analysts and investors have varying opinions of Tesla and its controversial chief executive. But they agree on this: Tesla stock trades at higher levels than other electric vehicle companies. In other words, it trades at a premium because of Elon Musk.
"If Elon Musk was gone tomorrow, [the] stock could get cut in half," Roth Capital Partners analyst Craig Irwin told Yahoo Finance. "There's no question there's a Musk premium in the shares." Irwin holds a Buy rating on Tesla stock.
Others have different values for the Musk premium, ranging as high as 90%.
Musk's foray into politics, particularly his recent feud with President Trump, showcased how quickly the premium on Tesla shares can erode.
Mild CPI inflation reading not likely to shake the Fed's wait-and-see stance on tariffs
Yahoo Finance's Jennifer Schonberger reports:
Quantum stocks rise as Nvidia CEO says technology reaching ‘inflection point’
Quantum computing stocks jumped in early trading Wednesday after Nvidia (NVDA) CEO Jensen Huang made bullish comments about the technology at the chipmaker’s GTC Paris developer conference.
Quantum Computing (QUBT) rose more than 31% after market open, while Rigetti Computing (RGTI) jumped more than 18%. IonQ (IONQ) rose over 8%. The companies make quantum computing hardware and software.
By comparison, the S&P 500 (^GSPC) was up about 0.2%.
Huang told a crowd Wednesday that “we are within reach” of using quantum computers for “areas that can solve some interesting problems in the coming years.”
“Quantum computing is reaching an inflection point,” he said.
Stocks waver at the open
US stocks were muted at the open on Wednesday as investors digested a softer-than-expected consumer inflation reading and assessed a US-China plan to salvage their trade truce.
The Dow Jones Industrial Average (^DJI) slipped less than 0.1%, while the S&P 500 (^GSPC) was roughly flat. The tech-heavy Nasdaq Composite (^IXIC) climbed about 0.2%.
Platinum extends gain as market shows further signs of tightness
Platinum (PL=F) extended gains Wednesday, rising to its highest level in four years after trading sideways for about a decade.
Platinum prices were up 4% Wednesday morning to trade at $1,261.40 an ounce. Prices of the metal, which is used in electric vehicles, jewelry, and industrial applications, have soared 40% year to date.
Bloomberg reports that strained supply has caused prices to increase, particularly as President Trump's tariffs disrupted trade flows and output declined in South Africa, the world's largest platinum producer.
From Bloomberg:
Consumer prices largely rise less than expected despite tariff turmoil
Inflation didn't pickup as much as Wall Street expected in May.
The latest data from the Bureau of Labor Statistics showed that consumer prices increased 2.4% over the prior year in May, an increase from April's 2.4% and in line with economists' forecast for 2.4%. But all other closely watched metrics from the release came in below expectations.
On a month-over-month basis, prices increased 0.1%, lower than the 0.2% estimated by economists and the 0.2% increase seen in April.
On a "core" basis, which strips out the more volatile costs of food and gas, prices in April climbed 0.1% over the prior month, lower than April's 0.2% rise and below consensus projections for a 0.3% increase. Over the last year, core prices rose 2.8%, unchanged from the prior month and below Wall Street's expectations for a 2.9% increase.
The biggest IPOs look a lot like the biggest stocks in the market
The largest tech stocks in the market are once again leading the market higher. And in recent weeks, investor excitement surrounding Big Tech has trickled down to newly issued public offerings, such as stablecoin issuer Circle (CRCL) and Nvidia-baked CoreWeave (CRWV).
Yahoo Finance's Josh Schafer writes in today's Morning Brief:
Good morning. Here's what's happening today.
Trending tickers: GameStop, Tesla, and Victoria Secret
Here are some top stocks trending on Yahoo Finance in premarket trading:
GameStop (GME) stock fell 4% before the bell on Wednesday after posting its first quarter earnings the day prior. The US video game retailer announced net sales of $732.4M, down from $881.8M in the same period of 2024.
Tesla (TSLA) stock rose 1% in premarket trading, after CEO Elon Musk backtracked on his comments towards President Trump. Musk said: “I regret some of my posts about President @realDonaldTrump last week,” he said on his social-media platform, X. “They went too far.”
Victoria Secret's (VSCO) shares rose by 1% ahead of its earnings release on Wednesday. The retailer, which recently reported a cyberattack, is expected by analysts to reoort revenue of around $1.35B.
May CPI on deck: Inflation expected to tick higher as tariff uncertainty lingers
Yahoo Finance's Allie Canal reports:
Gold rises even as US and China agree to framework for restoring trade truce
Gold prices are edging higher even after the US and China talks delivered a plan to ease trade tensions, a sign the market is not yet convinced of a breakthrough.
Futures rose 0.7% to around $3,366 an ounce in early trading on Wednesday.
Bloomberg reported:
