S&P500 and Dow Jones: US Indices Stall Today Despite Soft CPI and Trade Deal Hopes

Stocks Open Flat as Inflation Relief and Trade Optimism Fail to Extend Rally

U.S. markets opened with little conviction Wednesday, following a strong rebound over the past week. Softer inflation data and progress toward a U.S.-China trade framework failed to trigger another leg higher. The S&P 500 was flat in early trading, the Dow slipped 0.1%, and the Nasdaq rose 0.2% as investors paused to assess recent gains.

With the S&P 500 just 2% off all-time highs and up in six of the past seven sessions, traders appeared content to lock in some profits. The pause came despite signs of easing inflation and a tentative deal between the world’s two largest economies on rare earth exports and tech access.

Does a Cooler CPI Signal Fed Flexibility?

May’s consumer price index rose 0.1%, undercutting economist estimates of 0.2%. Core CPI also landed at 0.1%, suggesting that price pressures remain tame despite tariff concerns. According to Goldman Sachs, companies may still be relying on existing inventories and delayed price adjustments in response to demand uncertainty.

This lighter CPI print gave bond yields some breathing room and helped reinforce bets that the Federal Reserve may have scope to ease policy if labor market data weakens further. For now, traders are focusing on upcoming job figures to gauge whether rate cuts may move from discussion to decision in the coming months.

Will the U.S.–China Deal Deliver Market Support?

Investors also digested early headlines from a preliminary U.S.–China trade outline reached in London. Under the proposal, China would resume rare earth mineral exports, while the U.S. would ease certain restrictions on tech sales. President Trump described the deal as “done, subject to final approval,” touting tariff advantages and concessions on education access for Chinese students.

Though the announcement offered a brief sentiment lift, traders remain skeptical until more specifics are finalized. Past negotiations have unraveled before full agreements were signed, keeping risk appetite in check.

Which Stocks Are Reacting at the Open?

Early movers reflected mixed sentiment. Warner Bros Discovery and First Solar rose over 2%, while Lockheed Martin and Nucor saw notable declines, shedding nearly 7% and 6%, respectively. Tesla also gained pre-market after announcing a July launch of its robotaxi program, adding a speculative bid to growth names.

Market Forecast: Will the Rally Resume or Stall Here?

With inflation data supportive and trade headlines encouraging but incomplete, markets may tread water near highs as traders await further catalysts. Eyes now turn to labor market data and Fed commentary.

If yields stay subdued and economic surprises remain mild, the current consolidation could set the stage for another test of February’s record highs.

However, lack of progress on trade or signs of economic softness may prompt a defensive rotation. Traders should remain data-driven and alert to headline risk.

More Information in our Economic Calendar.