4:16pm: Market bets on September rate cut
Wall Street wrapped up Tuesday with a split decision as tech stocks surged while more traditional blue-chip names dragged on the Dow.
The Dow Jones fell 270 points, or 0.6%, to close at 42,140, weighed down by losses in some of its largest components. Investors seemed to take a breather on the more established names as they digested fresh inflation data and tariff uncertainty.
Meanwhile, the broader S&P 500 managed to push higher, adding 42 points, or 0.7%, to settle at 5,887. Gains in growth-oriented sectors—particularly tech—helped the index shake off weakness in more defensive corners of the market.
Leading the charge was the Nasdaq, which jumped 302 points, or 1.6%, to close at 19,010. The tech-heavy index rode a wave of optimism after Nvidia (NVDA) soared nearly 6% on the back of trade-related news and renewed AI enthusiasm. The chipmaker crossed the $3 trillion market cap mark once again, reinforcing its status as a major driver of the current rally.
Other tech titans weren’t far behind. Tesla (TSLA) climbed around 5%, and Meta (META) added nearly 3%, helping lift sentiment across the growth landscape.
Even small-cap stocks got a boost, with the Russell 2000 rising 10 points, or 0.5%, to end at 2,102, signaling ongoing interest in US-focused plays and a bit of confidence in the underlying economy.
On the macro front, April’s Consumer Price Index showed the slowest annual inflation rate since 2021, offering some relief to consumers and investors alike. However, any comfort was tempered by lingering questions about the long-term impact of recently reimposed tariffs and how the Fed might respond.
Bond markets reacted swiftly. The 10-year Treasury yield climbed to around 4.5%, its highest level in more than a month, as traders pushed back expectations for the first Fed rate cut from June to September.
All told, Tuesday's action reflected a market trying to balance short-term momentum in tech with longer-term caution around rates and trade.
3:11pm: Stocks on the move
JD.com Inc reported a 15.8% year-over-year revenue increase to RMB301.1 billion ($141.5 billion) in Q1, boosting its U.S.-listed shares.
Hertz shares tumbled over 14% after the company posted a wider-than-expected Q1 adjusted loss of $1.12 per share.
Coinbase Global Inc surged nearly 19% after being selected to join the S&P 500, becoming the index’s first crypto-focused member.
Candel Therapeutics Inc posted a Q1 profit of $7.4 million and reaffirmed plans to submit a BLA for its prostate cancer therapy in late 2026.
UnitedHealth Group Inc shares fell more than 10% premarket after it withdrew full-year guidance and reappointed former CEO Stephen Hemsley to lead the company.
1:52pm: 'Buy America' rally
The recent rally in US stocks may be losing steam as concerns about tariffs and long-term tech competitiveness weigh on investor sentiment, according to Kathleen Brooks, research director at XTB.
Although the US is lowering some tariff rates, “a rate of 30% on Chinese goods coming into the US is still going to impact the consumer and corporate earnings,” Brooks noted, adding that upcoming earnings from Walmart will be key to gauging the broader impact.
The tariff uncertainty also has broader implications for the US tech sector, which Brooks said may struggle to maintain its leadership in global markets.
Even though tensions with China have eased slightly, she warned that “the recent trade embargo between the two nations may entice even more Chinese innovation into the area of AI and chip technology,” with companies like Huawei and Alibaba ramping up domestic chip development that could reduce Asia’s reliance on US firms such as Nvidia.
"Due to the size of the US tech sector, this could hinder the ability for US stocks to outperform this year, even if they are in recovery mode right now," Brooks added.
12:44pm: Cooling inflation boosts Nasdaq
US stocks are painting a mixed picture at midday as Wall Street processes fresh inflation data and a potential easing in trade tensions with China. While tech stocks are surging, the blue-chip Dow is feeling the weight of company-specific woes.
At midday, the Dow Jones Industrial Average is down 0.4%, while the S&P 500 is up 0.7% and the Nasdaq Composite is leading with a gain of 1.5%.
The Dow is dragging its heels after UnitedHealth Group tumbled sharply. The health insurer shocked investors by suspending its full-year outlook and announcing that CEO Andrew Witty is stepping down. With UnitedHealth being one of the highest-priced components in the price-weighted index, its drop is having an outsized effect.
In contrast, the Nasdaq is powering ahead, buoyed by retreating inflation numbers and signs of a thaw in trade tensions. China’s move to lower tariffs on US goods from 34% to 10% is being viewed as a constructive step, particularly for tech and consumer-facing companies.
"Who would have thought that within a matter of weeks US stock indices would be trading back in positive territory for the year? Yet, here we are," said Axel Rudolph, Senior Technical Analyst at online trading platform IG.
"Slowing US inflation, both headline and core, coupled with China's Finance Ministry announcing a pause in additional tariffs - effectively lowering tariffs on US goods from 34% to 10% - helped heave the Nasdaq 100 and S&P 500 back into positive territory for the year.”
11:54am: Tuesday's headlines
UnitedHealth Group withdrew its guidance for the current year and announced the departure of its chief executive officer, causing shares to drop on Tuesday morning.
US consumer prices rose moderately in April, offering a dose of relief to investors and policymakers concerned about persistent inflation and the potential economic fallout from new tariffs.
Goldman Sachs has hiked its 2025 growth forecast by 0.5 percentage points to 1% in the fourth quarter, and reduced its 12-month recession odds to 35%.
Coinbase has become the first crypto-focused company to be added to the S&P 500 stock index.
11:12am: Inflation cools, but risks remain
The inflation data, along with signs of cooling in certain categories, has calmed markets and lessened immediate pressure on the Federal Reserve to act. “The benign April CPI print doesn’t really move the needle for the Fed,” Bank of America noted, saying the central bank is unlikely to cut rates unless the labor market shows clear signs of weakness.
For now, businesses appear to be holding off on passing along higher costs from new import tariffs. “Businesses largely refrained from pre-emptive increases in the prices of goods subject to tariffs last month,” said Bill Adams, chief economist at Comerica Bank. While Adams expects inflation to pick up in the second half of the year, he added, “Price pressures from tariffs will probably be manageable for most businesses and consumers.”
As well, global trade uncertainty continues to cloud the outlook. “Improvements in global trade will provide some clarity on the future path of inflation,” said Jeffrey Roach, chief economist at LPL Financial. “However, the uncertainty about what might happen after these temporary trade deals makes things difficult for the Fed since stagflation remains a risk.”
10:35am: Small biz confidence drops
Small business confidence continued to decline in April, with the NFIB Small Business Optimism Index falling by 1.6 points to 95.8, marking its fourth consecutive decline.
The decline was largely driven by a drop in economic expectations and labor demand.
Small business job openings dropped to their lowest levels since January 2021, with just 34% of firms reporting unfilled positions.
"A cloudy economic outlook weighed on labor demand in April," Wells Fargo analysts noted, as hiring plans remained subdued at 13%.
Tariff-related uncertainty contributed to a dimmer economic outlook, influencing sales expectations and capital expenditure plans. Despite this, tariffs had not significantly impacted small business pricing measures, with inflation becoming less of a concern.
Inflation dropped to the third most pressing issue for small businesses, with a decline in both the number of firms raising prices and those planning price hikes. Meanwhile, labor quality remained the top challenge for small firms, despite signs of an easing labor market.
"Labor quality ranked as the most important problem facing small businesses," analysts wrote.
Capex plans also softened, with only 18% of firms planning capital expenditures, the lowest since the pandemic's peak.
9.55am: Stocks mostly higher, Dow hit by healthcare
It's a mixed open for US stocks, with the S&P 500 up 0.4% and the Nasdaq climbing 0.9%, but the Dow Jones down 0.3%.
The Dow is being weighed down by an 11% fall for health insurance giant UnitedHealth Group after it withdrew guidance.
Other health care names are also dragging on the Dow, with Merck & Co, Johnson & Johnson and Amgen next on the fallers list.
Top risers on the S&P include Super Micro Computer, Palantir and Nvidia. Microsoft, Apple, Alphabet and Tesla are all slightly in the red after large rises yesterday.
8.45am: Stock futures rise after CPI print
US inflation has come in as expected, which has lifted stock futures.
Headline CPI was up 0.2% in April on a month-on-month basis (lower than the 0.3% expected), lowering the yearly rate to 2.3% from 2.4%, a new four-year low.
Core CPI was up 0.2% in April, keeping the YoY rate at 2.8%, as expected.
US stock futures have spiked. The S&P 500 is seen rising 0.2% and the Nasdaq 0.4%.
8am: Dow Jones set to lead fall as UnitedHealth plunges
US stocks are set to see some of their strong gains from the start of the week wiped out, as futures on Tuesday were pointing to a mixed start on Wall Street.
Futures for the S&P 500 index were down 0.2%, while those for the tech-powered Nasdaq were less than 0.1% in the red.
Dow Jones futures were down 0.6%, mostly due to shares in UnitedHealth Group Inc (NYSE:UNH, ETR:UNH) falling 10.4% in premarket trading after the health insurance giant suspended its guidance and announced a change of CEO.
United said CEO Andrew Witty had decided to step down as CEO for personal reasons, with former boss Stephen Hemsley, who led the company from 2006-2017, taking the CEO role as well as remaining chairman of the board. Witty will serve as an adviser to Hemsley.
The day before, the Nasdaq jumped almost 4.4%, the S&P climbed 3.3% and the Dow added 2.8%.
This was on the back of a US-China agreement to lower tariffs for 90 days while trade talks continue, with US cutting down from 145% to 30% - while China dropped their 125% tariffs on US goods to 10%.
"The dramatic reduction in tariffs is only a temporary one for 90 days, but as far as markets are concerned, there’s now a belief that the worst of the trade war has passed, and that the trend is now towards de-escalation," said Deutsche Bank, noting "a phenomenal rally across multiple asset classes", with US 2-year and 10-year bonds selling off and lifting yields sharply.
The bank's economists suggest there is now some "downside risks" to current inflation forecasts, as well as "upside risks" remaining from sectoral tariffs and greater passthrough from tariffs to consumer prices in response to the broader weakening in the dollar.
Goldman Sachs responded by upping its US growth forecasts today, in light of the pause and the "meaningful easing in financial conditions" over the last month.
The US bank has hiked its 2025 growth forecast by 0.5 percentage points to 1% for the fourth quarter, and reduced its 12-month recession odds to 35%, down from 45% just over a month ago.
"We expect the Fed to begin a series of three cuts later than we had previously expected (December vs our prior expectation of July) and to implement them at every other meeting rather than sequentially."