The trading session concluded with the Dow Jones Industrial Average gaining 0.78%, while the Nasdaq also advanced and the S&P500 increased by 0.70%.
The day was “calmer, lacking the fireworks from earlier in the week, but ended well for the stock market,” according to Christopher Low of FHN Financial.
On Monday, the stock market had soared sharply following announcements of the suspension of the core punitive tariffs that the US and China had imposed on each other.
Under this agreement, both countries agreed to reduce their respective tariffs by 115 percentage points, setting them at 30% for US tariffs on Chinese imports and 10% for Chinese tariffs on US imports.
The “promise of further progress in trade agreements (…) reinforced the positive image of US economic growth,” remarked Low.
On April 2, Trump imposed substantial tariffs on goods exported to the US from all countries, at a minimum of 10%, before nearly backing down amidst global economic disorder.
Subsequently, negotiations commenced between the US and several of its trading partners.
Conversely, there was “a sense of relief when most statistics confirmed (…) weaker price increases than anticipated,” noted Low.
The Consumer Price Index (CPI), released on Tuesday, indicated that inflation cooled in April more than analysts had predicted.
The Producer Price Index (PPI) even showed a decrease, contrary to expectations for an increase.
However, consumer confidence in the US continued to decline in May, despite expectations of a slight rise due to eased trade tensions, as shown by an index released today.
“Households have expressed some of their anxiety over rising prices and their concerns about tariff-induced inflation in the coming months,” stated Jose Torres of Interactive Brokers in an analytical note.
