U.S. stocks dipped on Wednesday as investors digested softer-than-expected inflation data and weighed tentative progress from the Chinese mainland–U.S. trade talks in London.
The Dow Jones Industrial Average slipped just 1.10 points to close at 42,865.77, while the S&P 500 fell 0.27% to 6,022.24 and the Nasdaq Composite lost 0.50%, ending at 19,615.88. Losses were broad but modest, with consumer discretionary and materials stocks leading declines, down 1.02% and 0.98%, respectively. Energy names bucked the trend, gaining 1.49% on the back of rising oil prices, and utilities held steady, up 0.05%.
Earlier, the U.S. Consumer Price Index for May came in below forecasts, rising just 0.1% month-on-month and 2.8% year-on-year when stripping out food and energy. That cooler-than-expected reading boosted hopes that the Federal Reserve could cut rates later this year. The CME FedWatch Tool now puts the odds of a September rate cut at 57.2%, up from 53.5% a day earlier, and the 10-year Treasury yield dipped to 4.41%.
“With a solid May jobs report already in the books, this CPI data reduces fears of a nasty bout of stagflation,” wrote Bank of America U.S. economist Stephen Juneau. But economist Claudia Sahm cautioned against reading too much into one report, noting that ongoing trade policies could still sway the outlook.
Tech mega-caps felt the pressure: Apple and Amazon each slid around 2%, while Nvidia, Alphabet, and Meta dropped about 1%. Chipmaker Broadcom bucked the trend with a 3.38% gain, and Microsoft and Tesla edged up slightly. Intel led S&P 500 fallers, tumbling 6.46% to give back most of Tuesday’s rally, and AMD shares dipped 1.7% ahead of its “Advancing AI” event.
As markets navigate the interplay of U.S. inflation, Fed policy bets, and trade dialogues with the Chinese mainland, investors are watching closely for signals on the next big move in global markets.
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U.S. stocks dip as investors weigh inflation, China-U.S. trade talks
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