The S&P 500 rose on Tuesday, wiping out its losses for 2025. Tech stocks led the rally after April inflation numbers eased and optimism continued over the US-China trade truce. The index rose 0.7%, marking a turnaround from earlier in the year.
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The Nasdaq Composite surged 1.8%, entering a new bull market. The Dow Jones Industrial Average slid 0.6%. Nvidia powered the tech rally, with shares adding almost 6%.
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Trade news bolstered prospects for the AI chip giant. Tesla rose about 5% and Meta increased nearly 3%. April’s Consumer Price Index showed the slowest annual inflation rate since 2021.
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Markets now price in a potential 0.25% rate cut in September, a shift from previous expectations. The 10-year Treasury yield hit its highest levels in over a month at around 4.5%. Companies are bracing for impacts from tariffs.
Honda warned about consequences for its profit due to new auto duties.
April CPI shows slowing inflation
UnitedHealth faced volatility as its CEO stepped down, leading to a 12% drop in its stock.
The S&P 500 erased a 15% year-to-date loss in less than six weeks, the fastest recovery since 1982. Palantir jumped 9% after the US unveiled a $142 billion defense deal with Saudi Arabia. Coinbase surged more than 18% as it became the first crypto exchange in the S&P 500.
President Trump called on the Federal Reserve to cut rates following the cool inflation reading. He emphasized the economy is poised for growth. Wall Street strategists raised outlooks for US stocks, citing easing tariffs.
Goldman Sachs raised its year-end S&P 500 target to 6,100. Yardeni Research projected 6,500. Boeing hit a 52-week high as China lifted restrictions, allowing new plane deliveries amid eased tariffs.
Boeing also received orders from Saudi Arabia’s AviLease for up to 30 Boeing 737 Max jets. The easing of tariffs and positive corporate news fueled a significant stock market rally. Major indices recovered from earlier losses and economic indicators showed signs of stability.
