Stocks dipped lower Wednesday as investors digested a softer-than-expected inflation reading and news that trade representatives from the U.S. and China have reached another preliminary trade agreement.

The Dow Jones Industrial Average (DIA  ) slipped below the flatline, while the S&P 500 (SPY  ) and Nasdaq Composite (QQQ  ) lost about 0.3% and 0.5%, respectively. The broader market S&P 500 is now less than 3% below its all-time high reached in February; the index was briefly 20% below that record in April following the deep sell-off in response to President Donald Trump's "Liberation Day" tariff announcement.

The consumer price index rose by a less-than-expected 0.1% in May from April, the Bureau of Labor Statistics reported Wednesday, down from the previous monthly gain of 0.2% -- the rate that is generally accepted by economists to tame inflation towards the Federal Reserve's long-term goals. Core CPI, which excludes food and energy prices, also came in at a less-than-expected 0.1% for the month.

Trade officials from the United States and China agreed on a trade policy framework on Wednesday after two days of talks in London, with the deal calling for Beijing to allow exports of rare earth minerals if Washington rolls back restrictions on the sale of semiconductor technology to China. Trump wrote in a post on his social media platform Truth Social earlier on Wednesday that the deal with China is "done, subject to final approval with President Xi and me," adding that "WE ARE GETTING A TOTAL OF 55% TARIFFS, CHINA IS GETTING 10%."

On the corporate side, Nvidia (NVDA  ) CEO Jensen Huang said during his keynote speech at the chipmaker's GTC Paris developer conference on Wednesday that "quantum computing is reaching an inflection point" where he expects the technology to be able to solve problems too complex for current computers in the coming years. Huang's remarks helped lift other quantum computing stocks including Rigetti Computing (RGTI  ), Quantum Computing (QUBT  ) and IonQ (IONQ  ) higher on Wednesday.

Huang said that the industry is "within reach" of being able to use quantum computers "in areas that can solve some interesting problems in the coming years." Huang's comments follow IBM's (IBM  ) timeline announced Tuesday to build the first large-scale quantum computer capable of solving advanced mathematical problems by 2029.

Wall Street has been paying close attention towards trade discussions between the U.S. and China as recent economic data shows both job growth and inflation have slowed in May. More reports on inflation and consumer sentiment are due out this week, including the producer price index reading on Thursday and the University of Michigan's consumer survey due out on Friday.

This week's economic data is also the last policymakers will see before the next Federal Open Market Committee meeting on June 17-18. While market participants widely expect the central bank to hold interest rates steady for their next two meetings, the odds of a rate cut in September increased following Wednesday's CPI report -- markets are now pricing in a 70% chance the Fed will cut rates by at least 25 basis points, according to CME Group's FedWatch tool.

With that in focus, JPMorgan Chase CEO Jamie Dimon warned on Tuesday that the U.S. economy is still vulnerable to a recession in the coming months and that Wall Street's so-called soft landing is looking weaker moving forward, stating that "there's a chance real numbers will deteriorate soon," during a Morgan Stanley conference on Tuesday.