The broader market rose Tuesday, with the S&P 500 Index erasing its losses for the year, as market optimism continued from the previous session on a cooler-than-expected inflation reading.
The S&P 500 is now up 0.1% for 2025 based on Tuesday's intraday performance, climbing back from the near bear market the index reached at one point following the initial reactions to President Donald Trump's "Liberation Day" in early April where he unveiled a barrage of so-called "reciprocal" tariffs on most trading partners.
The Dow Jones Industrial Average nearly 270 points -- impacted by a more than 17% dropped in UnitedHealth (NYSE: UNH) shares -- while the Nasdaq Composite added over 1.6% -- benefitting from Nvidia's (NASDAQ: NVDA) gains alongside the S&P 500.
Here's how the market settled on Tuesday:
S&P 500 Index (NYSE: SPY): +0.72% or +42.36 points to 5,886.55
Dow Jones Industrial Average (NYSE: DIA): -0.64% or -269.67 points to 42,140.43
Nasdaq Composite Index (NASDAQ: QQQ): +1.61% or +301.74 points to 19,010.08
Consumer Prices rose at a softer-than-expected clip in April, boosting already positive sentiment on Wall Street after the U.S. and China agreed to a 90-day tariff reduction over the weekend -- sending the Dow over 1,100 points higher on Monday. The report notably showed no signs that Trump's tariffs immediately impacted prices throughout the month.
The consumer price index (CPI), which measures the costs of common goods and services, rose to a seasonally adjusted 0.2% last month, the Labor Department reported Tuesday, bringing its annual inflation rate to 2.3% -- the lowest since February 2021. Excluding food and energy prices, core CPI also rose 0.2% month-over-month and 2.8% over the previous year. All of April's readings came in-line or below economists' expectations.
Following the inflation reading, Trump reiterated his stance for the Federal Reserve to lower interest rates, calling for policymakers to follow recent decisions from Europe and China.
"THE FED must lower the RATE, like Europe and China have done. What is wrong with Too Late Powell?," Trump wrote in a post on his social media platfrom Truth Social, using the mocking nickname he has given to Fed Chair Jerome Powell. "Not fair to America, which is ready to blossom? Just let it all happen, it will be a beautiful thing!"
Economists on Tuesday have broadly argued that April's inflation reading does not provide the full picture of tariff impacts across the economy and is unlikely to sway the central bank's cautious, wait-and-see approach towards monetary policy in the near-term.
In the News:
UnitedHealth Group shares fell on Tuesday after the insurance giant announced the surprise exit of CEO Andrew Witty and suspended its 2025 outlook. Witty is stepping down for "personal reasons," according to the company, and will be a senior advisor to his successor, Stephen Hemsley, who previously held the lead position from 2006 to 2017.
The company cited higher medical costs of "many Medicare Advantage beneficiaries new to UnitedHealthcare" as the partial reason behind its decision to suspend its full-year outlook; United posted its first earnings miss since 2008 in its most recent quarter. The company expects to return to growth in 2026.
Nvidia shares rose higher Tuesday after CEO Jensen Huang announced the chipmaker will sell more than 18,000 of its GB300 Blackwell artificial intelligence chips to Saudi Arabian firm Humain to be used in a 500 megawatt data center. The deal was part of the Trump administration's trip to the region. This will be Nvidia's first deployment of its most advanced AI chip, which was officially unveiled earlier this year.
"I am so delighted to be here to help celebrate the grand opening, the beginning of Humain," Huang said on Tuesday. "It is an incredible vision, indeed, that Saudi Arabia should build the AI infrastructure of your nation so that you could participate and help shape the future of this incredibly transformative technology."
Separately, the White House announced Tuesday that Saudi Arabia has committed to invest $600 billion in the U.S., funding projects with focus on technology and defense.
Coinbase (NASDAQ: COIN) shares rallied higher on Tuesday, a day after the S&P Dow Jones Indices announced the crypto exchange platform will be added to the S&P 500 before market open on May 19, replacing Discover Financial Services (NYSE: DFS) -- Discover it currently in the process of being acquired by Capital One Financial (NYSE: COF).
Looking Ahead:
Market participants will turn their attention towards a series of Fedspeak on Wednesday for more insights on the direction of monetary policy.