The stock market cleared another big hurdle after consumer price inflation came in cooler than expected, but the major indexes struggled to hold onto gains at the open.
The S&P 500 was flat after opening higher on Wednesday. The Dow Jones Industrial Average was down 31 points, or 0.1. The Nasdaq Composite was up 0.2%.
The yield on the 2-year Treasury note sank to 3.96%. The 10-year yield dropped to 4.44%.
The consumer price index for May rose 2.4%, compared to expectations for a 2.5% uptick. While the report on its own likely won’t be enough to sway the Federal Reserve to lower interest rates before the September meeting, it was a positive sign for those worried President Donald Trump’s tariffs have begun to raise prices.
“Despite sticky inflation, tariffs have not yet showed up in consumer prices, but a lot depends on the absorption rate of U.S. companies and foreign suppliers,” writes Eric Teal, Chief Investment Officer for Comerica Wealth Management. “We believe that the majority of the tariffs will eventually get passed to the consumer, but companies are cautious at this juncture about passing along the price increase.”
Stock futures had dipped a touch after Trump said the U.S.’s deal with China was done—subject to final approval by the president and Chinese President Xi Jinping—putting tariffs on China at 55%. Tariffs on U.S. goods imported to China will be 10%.
“FULL MAGNETS, AND ANY NECESSARY RARE EARTHS, WILL BE SUPPLIED, UP FRONT, BY CHINA. LIKEWISE, WE WILL PROVIDE TO CHINA WHAT WAS AGREED TO, INCLUDING CHINESE STUDENTS USING OUR COLLEGES AND UNIVERSITIES (WHICH HAS ALWAYS BEEN GOOD WITH ME!),” Trump said in an all-caps post on Truth Social.
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