S&P500 and Nasdaq: Soft CPI Boosts Nvidia and Coinbase; UNH Falls

S&P 500 and Nasdaq Gain on Soft Inflation and Trade Truce; UnitedHealth Drags Dow

U.S. equities advanced Tuesday, with the S&P 500 and Nasdaq extending gains after April’s consumer price index (CPI) came in below expectations and a U.S.-China tariff reprieve eased recession concerns. The Dow lagged, weighed down by a steep drop in UnitedHealth shares following a leadership shake-up and suspended guidance.

What Did the April CPI Data Show?

April CPI rose 0.2% month-over-month, under the 0.3% estimate, while annual inflation slowed to 2.3% from 2.4%. The softer inflation reading gave traders confidence that the Federal Reserve will delay interest rate cuts until September.

Markets are still pricing in two 25-basis-point cuts by year-end. A lower inflation path gives the Fed room to be cautious, which traders interpreted as supportive for risk assets.

How Did the Tariff Truce Reassure Markets?

The U.S. and China agreed to a 90-day pause on reciprocal tariffs, reducing U.S. duties on Chinese imports to 30% and Chinese tariffs to 10%. This agreement followed fears of an economic downturn triggered by aggressive trade policy.

Brokerages quickly lowered their U.S. recession risk estimates. The agreement also lifted confidence in continued global trade stability, helping equities recover losses dating back to April 2.

Tech Stocks Extend Leadership

Technology continued to outperform. Nvidia surged 5.6%, while Meta Platforms, Netflix, and Amazon each gained over 2%. The Nasdaq climbed 1.8%, powering the S&P 500 to a 0.9% gain on the session. The tech sector index rose 2.35%, leading all sectors by percentage.

Strong chip demand, growth in AI-related services, and supportive rate expectations all fueled renewed buying in megacaps and growth names.

Crypto Sentiment Surges with Coinbase Rally

Coinbase jumped 19% after being selected for inclusion in the S&P 500, replacing Discover Financial Services. The upcoming index addition sparked significant buying interest, while bitcoin’s climb past $104,000 added momentum.

Analysts framed Coinbase’s inclusion as a pivotal moment for crypto’s standing in mainstream finance, with passive inflows expected to continue into next week.

Energy, Industrials, and Financials Show Modest Strength

Energy rose 1.7%, supported by a rebound in oil prices. Industrials gained nearly 1%, while financials advanced 0.56% as easing rate fears and stable earnings helped lift sentiment.

Chevron underperformed peers after HSBC downgraded the stock to “hold,” citing a slowdown in buybacks. The company plans to repurchase $2.5–$3 billion in Q2, down from $3.9 billion in Q1.

Healthcare Sector Slides on UnitedHealth Warning

Healthcare fell 2.47%, the weakest sector on the day. UnitedHealth plunged more than 15% after suspending guidance and announcing CEO Andrew Witty’s resignation. Former CEO Stephen Hemsley will step back in.

The sell-off spilled into peer stocks, as concerns mounted over rising medical costs and regulatory uncertainty.

What’s the Near-Term Market Outlook?

Traders are closely watching upcoming remarks from Federal Reserve officials, especially Chair Jerome Powell on Thursday, to clarify policy direction.

Retail earnings, including results from Walmart, could offer fresh insight into consumer strength. With volatility declining—VIX dropped below 18—momentum could build if economic signals remain aligned with easing rate expectations.

More Information in our Economic Calendar.