Stock Market Rise Pauses Despite Inflation Data
Stocks in the U.S. enjoyed healthy gains on Wednesday, renewing a comeback rally, the result of softer-than-expected U.S. inflation data, and the U.S. and China reaching the preliminary outline of a possible trade agreement.
The Dow Jones Industrials gained 143.52 points to 43,010.39.
The S&P 500 index added 17.34 points to 6,056.15. The much broader index rose in six of the last seven trading days and was less than 2% below a record reached in February. At one point, the benchmark index was about 20% below a record.
The NASDAQ Composite improved 78.2 points to 19,793.19.
The consumer price index rose 0.1% in May from April, less than the 0.2% estimate from economists polled by Dow Jones. Core CPI, which strips out volatile food and energy prices, also increased 0.1%, less than expected.
U.S. and Chinese officials reached a consensus after a round of talks in London. As part of the framework, China would approve the exports of rare earth minerals while the U.S. would roll back restrictions on the sale of advanced technology to China.
President Donald Trump said in a Truth Social post on Wednesday that the deal with China is “done, subject to final approval with President Xi and me”. He added that “WE ARE GETTING A TOTAL OF 55% TARIFFS, CHINA IS GETTING 10%.”
As part of the trade agreement, he said that magnets and “any necessary rare earths” will be supplied up front by China and the U.S. will allow Chinese students to attend U.S. colleges and universities. The prospect of opening up China to American trade is “a great WIN for both countries,” Trump said in the post.
Prices for the 10-year Treasury gained, lowering yields to 4.45% from Tuesday’s 4.47%. Treasury prices and yields move in opposite directions.
Oil prices added $1.60 to $66.58 U.S. a barrel.
Gold prices brightened $12.30 to $3,355.90 U.S. an ounce.
