US stocks oscillated between small gains and losses on Wednesday, as traders look past an upbeat report on cooling consumer prices and assess the outlook for global trade.
The S&P 500 Index rose 0.1% as of 9:39 a.m. in New York, leaving it just 1.6% from its Feb. 19 record after Washington and Beijing said they had reached a trade framework. The Nasdaq 100 Index climbed 0.2%, putting it within 1% of its peak. A basket tracking the Magnificent Seven stocks including Nvidia Corp., Alphabet Inc. and Meta Platforms Inc. rose just 0.5%.
After two days of discussion in London, the agreement reached between the world’s two largest economies appears to be a consensus on what was already agreed upon before. That said, President Donald Trump’s approval is still needed. Uncertainty over what is to come continues to impact Corporate America’s profit outlook.
“Any negative developments near-term have the potential to reignite broad market volatility in a meaningful way” wrote Tom Essaye, founder of The Sevens Report newsletter.
The S&P 500 has powered 21% higher since its April lows after teetering on the brink of a bear market two months ago after Trump rattled financial markets with aggressive tariffs that sparked worries recession fears. Much of the rally has been pinned on hopes that Trump would lower his tariffs after reaching trade deals with countries around the world, with the S&P 500 back within 1.7% of its February record.
Stocks have been trading in a narrow range this month following the S&P 500’s best May since 1990. Through Tuesday, the equity benchmark hadn’t seen a move exceeding 0.6% in either direction during nine of the past 10 sessions, according to data compiled by Bloomberg.
The US and China have put many of their tariffs on pause as talks continue. Trump said a trade framework was completed that included an agreement for Beijing to supply rare earths “UP FRONT” and access for Chinese students at American universities, according to a post on social media.
Among other individual stock movers, Tesla Inc. rose 2.3%, recovering since the electric-vehicle company tumbling last week after Elon Musk said he regrets some of his posts about Trump last week after their relationship imploded. That raised fear about possible retaliation by the US government against Tesla.
Underlying US inflation rose in May by less than forecast for the fourth month in a row, a step in the right direction for the Federal Reserve looking to cut interest rates further in 2025. Core CPI, which strips out volatile food and energy components, climbed 0.1% in May from a month ago — below estimates for 0.3%, Labor Department data show.
“Weaker-than-expected CPI opens the door to a Fed rate cut in September, since it’s clear that the inflation data continues to move in the right direction even as we deal with tariff uncertainty” wrote Skyler Weinand, chief investment officer at Regan Capital.
Elsewhere, steel stocks fell as the US and Mexico closed in on a deal that would remove 50% tariffs on steel imports up to a certain volume, with Cleveland-Cliffs Inc., Nucor Corp. and Steel Dynamics Inc. all trading lower. In the meantime, GameStop Corp. declined 3.9% after the video-game retailer posted a 17% decrease in first quarter net sales.
In other news, Gitlab Inc. tumbled 11% after the application software company issued a disappointing second-quarter revenue forecast. Chewy Inc. declined 12% after the pet food company’s gross margin and free cash flow fell short of expectations. And Dave & Buster’s Entertainment Inc. rallied 14% after commentary that sales are improving reassured analysts, even as the company’s first-quarter results came in lighter than expected.
Oracle Corp. is scheduled to report quarterly earnings after the closing bell, with investors watching for a jump in bookings from its cloud business with OpenAI.
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