NEW YORK, May 13 (Xinhua) -- U.S. stocks ended mixed on Tuesday as investors welcomed fresh signs of easing inflation and continued to ride the momentum from less trade tensions between the United States and China.
The S&P 500 rose 42.17 points, or 0.72 percent, to close at 5,886.55, while the Nasdaq Composite advanced 300.95 points, or 1.61 percent, ending the day at 19,010.08. In contrast, the Dow Jones Industrial Average lost 269.67 points, or 0.64 percent, weighed down by a sharp fall in shares of key component UnitedHealth.
Among the S&P 500 sectors, technology led sector gains with a 2.25 percent jump, followed by consumer discretionary and energy, which rose 1.41 percent and 1.32 percent, respectively. Communication services and industrials also posted solid advances. On the downside, health care saw the steepest drop, falling 2.97 percent, while consumer staples and real estate declined 1.24 percent and 1.30 percent, respectively. Utilities, materials, and financials saw more modest moves, finishing mixed on the day.
U.S. consumer price index (CPI) for April, released Tuesday morning, showed the slowest annual growth rate since 2021, offering relief to markets rattled by tariff uncertainty. Despite U.S. President Donald Trump's shifting tariff policies throughout the month, the CPI showed no immediate signs of accelerating price hikes, which helped boost investor sentiment.
Bond traders, however, remained cautious. While the full inflationary effects of Trump's tariffs may take time to surface, market expectations for monetary policy have already shifted. Traders are now pricing in this year's first rate cut of 25 basis points in September, pushing back earlier expectations for a move in June.
Trump again called on Federal Reserve Chair Jerome Powell to cut rates after cool inflation reading. "No Inflation, and Prices of Gasoline, Energy, Groceries, and practically everything else, are DOWN!!!" Trump wrote on Truth Social Tuesday afternoon.
The inflation data helped fuel confidence in the stock market outlook.
Goldman Sachs raised its year-end target for the S&P 500 to 6,100, up from a previous forecast of 5,900. Yardeni Research took an even more bullish stance, lifting its projection to 6,500, citing reduced fears of a major economic slowdown. That target implies an additional 11 percent gain from current levels for the benchmark index.
"We raise our S&P 500 return and earnings forecasts to incorporate lower tariff rates, better economic growth, and less recession risk than we previously expected," Goldman Sachs chief U.S. equity strategist David Kostin wrote in a note to clients.
Still, not all sectors shared the optimism. Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management, said the CPI report didn't appear to capture the full impact of Trump's tariffs yet.
Meanwhile, Honda issued a warning on Tuesday, projecting a 3-billion-U.S.-dollar hit to full-year profit due to Trump's newly imposed auto tariffs. The Japanese automaker joins a growing list of multinational companies voicing concern over the trade policy fallout.
The healthcare sector also took a hit after UnitedHealth announced the immediate resignation of its CEO Andrew Witty and suspended its 2025 guidance. The stock fell around 17.79 percent, dragging down other healthcare names like Humana, after the company cited rising costs as a key challenge.
