The S&P 500 was flat in choppy trading on Wednesday after the week’s strong start on the back of encouraging inflation data and the U.S.-China tariff truce, as investors turned their attention to global trade developments.
Eight of the 11 major S&P sectors were trading lower, although a 0.5% advance in information technology helped stave off larger losses.
Most megacap and growth stocks ticked up, with Nvidia leading the charge with a 2.1% jump. Advanced Micro Devices gained 5.4% after the chip designer approved a new $6 billion share buy-back program.
As President Donald Trump secured $600 billion in commitments from Saudi Arabia during his tour of the Gulf states, a number of U.S. technology firms announced artificial-intelligence-related deals in the Middle East on Tuesday.
At 10:00 a.m. the Dow Jones Industrial Average rose 29.97 points, or 0.07%, to 42,170.40, the S&P 500 gained 1.61 points, or 0.03%, to 5,888.16, and the Nasdaq Composite gained 50.26 points, or 0.26%, to 19,060.35.
U.S. stocks have been buoyed since the weekend, when the United States and China hit pause on their fierce tariff dispute, signaling a joint effort to stave off a global economic downturn.
S&P 500, Nasdaq rise on trade optimism after soft inflation data
The U.S. will temporarily lower the extra tariffs it imposed on Chinese imports to 30% from 145% for three months, while Chinese duties on U.S. imports will fall to 10% from 125% in the same period.
“While there are undoubtedly still uncertainties and details to iron out with the trade negotiation with China, the easing of tensions is apparently enough for the markets,” said Rick Gardner, chief investment officer at RGA Investments, in e-mailed comments.
“(Markets) are typically forward-looking and are pricing in an environment where the U.S. and China are able to trade with each other,” he said.
Including the day’s gains so far, the S&P 500 has swung back into positive territory for the year, a milestone not seen since late February. However, the benchmark index is more than 4% off the record peaks it hit earlier this year.
A 90-day tariff pause announced on April 9 for countries other than China, along with solid earnings reports and a limited U.S.-UK trade agreement last week, helped the benchmark indexes claw back.
Tuesday’s data showed U.S. consumer prices rebounded moderately in April, with headline inflation rising 0.2%, compared with economists’ estimate of a 0.3% increase and versus a 0.1% drop in March.
U.S. Federal Reserve Vice Chair Philip Jefferson said recent inflation data indicated progress toward the central bank’s 2% target, yet the outlook remained uncertain as potential new import taxes could elevate prices.
As earnings season draws to a close, results from retail giant Walmart will be on the radar later in the week.
American Eagle Outfitters dropped 5.9% after the apparel company withdrew its annual forecasts, citing economic tariff-fueled uncertainty.
Declining issues outnumbered advancers by a 1.68-to-1 ratio on the NYSE, and by a 1.5-to-1 ratio on the Nasdaq.
The S&P 500 posted two new 52-week highs and six new lows, while the Nasdaq Composite recorded 40 new highs and 48 new lows.
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