US close: Stocks mixed as inflation comes in cooler

(Sharecast News) - Wall Street closed mixed on Tuesday as investors digested a weaker-than-expected US inflation report that revived hopes of interest rate cuts later this year.

The Dow Jones Industrial Average slipped 0.64% to 42,140.43, while the S&P 500 climbed 0.72% to 5,886.55, and the tech-heavy Nasdaq Composite advanced 1.61% to finish at 19,010.08.

In currency markets, the dollar was last down 0.98% on sterling to trade at 75.16p, as it lost 0.93% versus the euro to 89.36 euro cents, and declined 0.71% against its Japanese counterpart, changing hands at JPY 147.40.

"Both the Nasdaq and the S&P 500 are trading back in positive territory for the year as US inflation unexpectedly slows and China lowers tariffs on US goods," said IG senior technical analyst Axel Rudolph.

"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.

"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."

Rudolph noted that the Dow was closely following suit, but said the small cap Russell 2000 was lagging behind, trading around 5% lower when compared to the beginning of 2025.

"The German DAX index continues to trade near this week's record high amid a sharp rebound in the country's investor sentiment with only the FTSE 100 trading slightly lower on the day in Europe despite UK wage growth coming in slightly below estimates."

US inflation lower than expected, Goldman revises economic outlook

In economic news, US inflation came in lower than expected in April, easing pressure on the Federal Reserve and prompting a reassessment of economic and market forecasts.

Headline consumer prices rose 2.3% year-on-year, just below the 2.4% consensus forecast, while the core inflation rate held steady at 2.8%.

On a monthly basis, CPI increased 0.2%, a modest rise that suggests recent tariff hikes have yet to feed through into broader price levels.

Shelter costs accounted for roughly half of the monthly increase, while energy also contributed.

Meanwhile, prices declined in categories such as food, airfares, and used vehicles, helping temper overall inflation.

Elsewhere, in response to the US-China tariff truce announced earlier this week, Goldman Sachs revised its economic and market outlook.

The bank said it now expected US GDP growth to reach 1% in 2025 on a Q4-over-Q4 basis, up from a previous 0.5% forecast, and cut its 12-month recession probability from 45% to 35%.

It also raised its S&P 500 targets, forecasting levels of 5,900 in three months and 6,500 in a year, reflecting anticipated gains of 1% and 11% respectively.

Goldman said the lower-than-expected tariff increases and looser financial conditions support stronger corporate earnings and reduce downside risks.

As a result of the firmer growth outlook, the bank said it now expected the Federal Reserve to delay its first rate cut until December and to ease policy more gradually than previously anticipated.

Rather than back-to-back cuts, the Fed was now expected to lower rates at alternate meetings, as the rationale shifts from recession insurance to policy normalisation.

UnitedHealth tumbles on suspended guidance, Boeing in the green

In equity markets, UnitedHealth Group fell 17.79% after the healthcare giant suspended its annual guidance and announced that chief executive officer Andrew Witty would step down for personal reasons.

Microsoft shares edged 0.03% lower amid reports the company was planning to cut 3% of its global workforce.

On the upside, Boeing rose 2.46% following reports that China had lifted its ban on deliveries of US-made aircraft.

The move marked a significant de-escalation in trade tensions and could unlock orders previously frozen during the trade dispute.

Nvidia jumped 5.63% after it was reported the company would supply 18,000 of its advanced AI chips to Saudi Arabia, fuelling a rally in chip stocks.

Sector peers Broadcom and AMD gained 4.89% and 4.01%, respectively.

Elsewhere, Swiss running shoe company On Holding soared 11.83% after reporting better-than-expected earnings and revenue.

Chevron added 0.52%, defying a downgrade from HSBC, which cut the oil major's rating to 'hold' and lowered its price target.

Reporting by Josh White for Sharecast.com.

Dow Jones - Risers

Caterpillar Inc. (CAT) $352.83 2.92%

Boeing Co. (BA) $203.42 2.46%

Amgen Inc. (AMGN) $270.45 2.31%

Goldman Sachs Group Inc. (GS) $603.81 2.11%

Apple Inc. (AAPL) $212.93 2.04%

International Business Machines Corporation (CDI) (IBM) $258.59 1.93%

Microsoft Corp. (MSFT) $449.14 1.23%

Intel Corp. (INTC) $22.56 1.19%

JP Morgan Chase & Co. (JPM) $262.92 1.14%

American Express Co. (AXP) $302.30 1.13%

Dow Jones - Fallers

Unitedhealth Group Inc. (UNH) $311.38 -17.79%

Merck & Co. Inc. (MRK) $76.63 -4.72%

Johnson & Johnson (JNJ) $148.42 -3.70%

Procter & Gamble Co. (PG) $158.73 -1.35%

Travelers Company Inc. (TRV) $264.92 -1.17%

McDonald's Corp. (MCD) $308.69 -1.04%

Walmart Inc. (WMT) $95.88 -0.90%

Coca-Cola Co. (KO) $68.96 -0.82%

Verizon Communications Inc. (VZ) $42.65 -0.81%

Home Depot Inc. (HD) $373.60 -0.79%

S&P 500 - Risers

Nektar Therapeutics (NKTR) $0.71 14.48%

KLA-Tencor Corp. (KLAC) $795.90 6.63%

Nvidia Corp. (NVDA) $129.93 6.55%

Kohls Corp. (KSS) $8.06 6.47%

Broadcom Inc. (AVGO) $232.42 5.97%

Phillips 66 Common Stock (PSX) $125.57 5.81%

AES Corp. (AES) $12.60 5.73%

Mattel Inc. (MAT) $19.67 5.70%

Arista Networks Inc. (ANET) $97.25 5.34%

Fortinet Inc. (FTNT) $105.05 5.05%

S&P 500 - Fallers

Unitedhealth Group Inc. (UNH) $311.38 -17.79%

Elevance Health Inc. (ELV) $375.40 -9.91%

Humana Inc. (HUM) $228.89 -9.48%

CVS Health Corp (CVS) $60.50 -6.65%

Centene Corp. (CNC) $58.97 -6.20%

Simon Property Group Inc. (SPG) $160.88 -6.16%

Merck & Co. Inc. (MRK) $76.63 -4.72%

CIGNA Corp. (CI) $302.23 -4.39%

Johnson & Johnson (JNJ) $148.42 -3.70%

IQVIA Holdings Inc. (IQV) $150.68 -3.49%

Nasdaq 100 - Risers

KLA-Tencor Corp. (KLAC) $795.90 6.63%

Nvidia Corp. (NVDA) $129.93 6.55%

Broadcom Inc. (AVGO) $232.42 5.97%

Tesla Inc (TSLA) $334.07 5.82%

Regeneron Pharmaceuticals Inc. (REGN) $574.16 5.00%

Meta Platforms Inc. (META) $656.03 4.73%

Asml Holdings N.V. (ASML) $763.90 4.54%

Western Digital Corp. (WDC) $49.01 4.51%

Gilead Sciences Inc. (GILD) $101.43 4.50%

Seagate Technology Plc (STX) $105.47 4.17%

Nasdaq 100 - Fallers

Qvc Group Inc Series A (QVCGA) $0.13 -11.54%

Liberty Global plc Series C (LBTYK) $9.32 -3.22%

Monster Beverage Corp (MNST) $60.23 -3.04%

Mondelez International Inc. (MDLZ) $64.14 -2.93%

Dollar Tree Inc (DLTR) $85.71 -2.91%

Liberty Global plc Series A (LBTYA) $9.08 -2.84%

Electronic Arts Inc. (EA) $149.06 -2.28%

Gen Digital Inc. (GEN) $29.10 -1.99%

O'Reilly Automotive Inc. (ORLY) $1,320.80 -1.95%

Kraft Heinz Co. (KHC) $27.59 -1.83%