Investing.com -- The S&P 500 closed higher Tuesday, as data showing inflation slowed in April supported bullish sentiment on risk just days after the U.S.-China trade deal agreement.
At 4:00 p.m. ET (20:00 GMT), the Dow Jones Industrial Average fell 269 points, or 0.6%, while the S&P 500 jumped 0.7%, and the NASDAQ Composite gained 1.6%.
Inflation shows signs of cooling
The latest consumer price index, released earlier Tuesday, indicated that inflation remained contained, even as economists assessed the impact of rapidly-evolving U.S. trade policies.
The headline consumer price index grew by 2.3% in the 12 months to April, compared with expectations that it would match March’s pace of 2.4%. It was the lowest rate of inflation since February 2021, shortly before pent-up pandemic-fueled demand and supply constraints led to soaring prices.
Month-on-month, the measure came in at 0.2% following a decline of 0.1% in the prior month, according to Labor Department data on Tuesday. Estimates had called for an uptick of 0.3%.
Core inflation, which strips out volatile items like food and fuel, also rose 0.2% on a monthly basis, below the 0.3% expected, and 2.8% annually.
"There are no signs of tariffs pushing prices yet," Morgan Stanley said in a recent note, just days after the U.S. and China agreed a trade deal. Washington agreed to substantially cut its elevated tariffs on Beijing to 30%, after they were raised to at least 145% by President Donald Trump. China, meanwhile, said it would slash its levies to 10% from a retaliatory level of 125%. Both countries also said they would suspend the tariffs for 90 days.
The U.S. will also bring down tariffs on lower-value products imported from China, further cooling a trade spat with Beijing.
This news prompted economists at Goldman Sachs to cut their estimated risk of a recession in the U.S. to 35% from 45%.
China airlines return to Boeing - Bloomberg; Nvidia surges on major chip deal
In the corporate sector, Boeing (NYSE:BA) stock rose after Bloomberg reported that China has removed a month-long ban preventing local airlines from taking delivery of its planes, in another possible easing of the trade tensions between Washington and Beijing.
Government officials have begun instructing local carriers and government agencies this week that deliveries from the U.S. planemaker can resume, the Bloomberg report said, citing people familiar with the matter.
Elsewhere, NVIDIA Corporation (NASDAQ:NVDA) jumped more than 6% after announcing the sale of 18,000 of AI chips to Saudi Arabian company Humain. The Saudi-based company intends to use the chips to build its 500 megawatt data center.
Unitedhealth (NYSE:UNH) slumped after the health insurer suspended its full-year financial forecast due to a bigger-than-anticipated spike in medical costs, while CEO Andrew Witty has decided to step down from the helm of the company.
Under Armour (NYSE:UAA) stock rose after the sportswear maker’s quarterly revenue topped expectations, even after it reported a first-quarter loss.
Coinbase Global (NASDAQ:COIN) surged, with the crypto exchange set to join the S&P 500 index, replacing Discover Financial Services (NYSE:DFS) before the start of trading on May 19.
Peter Nurse, Ambar Warrick contributed to this article.