Stocks finished mostly higher on Tuesday, extending the prior session’s rally, on softer inflation data and trade optimism.
The Dow Jones Industrial Average closed 269.67 points, or 0.64%, higher, while the S&P 500 and Nasdaq Composite rose 0.72% and 1.61%, respectively.
The Bureau of Labor Statistics on Tuesday said that the consumer price index (CPI) – a broad measure of how much everyday goods like gasoline, groceries and rent cost – rose 0.2% in April compared with last month, while it was up 2.3% on an annual basis. The annual inflation rate was the lowest since February 2021.
Both of those figures were slightly cooler than the estimates of economists polled by LSEG, who predicted a monthly figure of 0.3% and annual inflation of 2.4%. The rise in monthly inflation comes after an unexpected decline in March, when it fell 0.1%. Headline inflation was unchanged in April.
Stocks surged on Monday after the U.S. and China agreed to roll back tariffs for a 90-day period.
The Dow Jones Industrial Average rose 1,160.72 points, or 2.81%, exiting correction territory. The S&P 500 climbed 3.26% and the Nasdaq Composite rose 4.35%, exiting bear market territory.
The tariffs President Donald Trump announced against China on April 2 are being cut by 24 percentage points for this temporary period while retaining the remaining ad valorem rate of 10% from that announcement, according to a joint statement.
China agreed to the same stipulations, adding that it will “adopt all necessary administrative measures to suspend or remove the non-tariff countermeasures taken against the United States since April 2,” the announcement stated.
