The stock market’s rally continued on Tuesday after the consumer price index for April was better than feared despite headaches caused by the White House’s on-again-off-again tariff policy.
The S&P 500 was up 0.5%. The Nasdaq Composite was up 1%. The Dow Jones Industrial Average was down 151 points, or 0.4%, but a majority of its members were rising; a double-digit decline for UnitedHealth Group shaved 250 points off the Dow to start the day.
The yield on the 2-year Treasury note was down to 3.98%, while the 10-year yield was down to 4.46%.
The April CPI cooled to a 2.3% annual rate, which was below expectations at 2.4%. The core CPI, which excludes food and energy, rose at a 2.8% annual rate, which was in line with expectations, though its 0.2% monthly rise was slower than expected.
“The downside surprise in the CPI doesn’t mean tariffs aren’t impacting the economy, it just means they aren’t showing up in the data yet,” writes Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management. “Wait-and-see is still the name of the game, and until that changes, the Fed will remain on the sidelines.”
Stocks rallied and bonds sold off on Monday as Wall Street rotated back toward riskier assets in the wake of the Trump administration’s decision to roll back most tariffs on Chinese goods to 30%, lifting sky-high tariffs that effectively served as a trade embargo.
The S&P 500 soared back above its 200-day moving average on Monday, among other key resistance levels watched by technical analysts, writes Frank Cappelleri, founder of technical analysis firm CappThesis.
“That’s a critical step—but now it must hold above those levels,” Cappelleri writes. “Remember, the index reclaimed the 200-DMA three different times in early 2022, but none of those holds lasted. All eyes are now on how well the SPX respects the 200-day line during the next bout of selling.”
Source: Stock Market Today: Dow Falls; S&P 500, Nasdaq Rise; CPI Inflation; Trump-China Deal;
