The S&P 500 (SPX) failed to close higher for a fourth consecutive day while the Nasdaq 100 (NDX) also finished in the red. That comes despite a U.S.-China framework trade deal and a soft CPI inflation report. Could the good news already be priced in?
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This morning, the May consumer price index (CPI) report showed inflation rising by 0.1% month-over-month (MoM) and 2.4% year-over-year. Economists were expecting a monthly rise of 0.2% and a yearly rise of 2.4%. Core CPI, which removes food and energy prices from the calculation due to their volatility, rose by 0.1% MoM and 2.8% YoY. Both monthly and yearly core CPI came in below the estimates for 0.3% and 2.9%, respectively.
“CPI JUST OUT. GREAT NUMBERS! FED SHOULD LOWER ONE FULL POINT. WOULD PAY MUCH LESS INTEREST ON DEBT COMING DUE. SO IMPORTANT!!!,” said President Trump on Truth Social in response to the report.
Trump also added that the U.S. and China have an excellent relationship after trade representatives from both sides reached a framework deal, which still must receive final approval from Trump and Chinese President Xi Jinping. Export controls are a major part of the agreement, with China agreeing to ease rare earth export restrictions and the U.S. agreeing to export more aircraft parts and ethane.
The U.S. and Canada are also making progress on a trade deal. The two countries have exchanged a working document back and forth that details trade policies, according to CBC, although sources close to the matter said that more time would be required before it could be signed.
As for the July 9 reciprocal tariff pause deadline, countries negotiating with the U.S. could potentially receive an extension, said Treasury Secretary Scott Bessent in a hearing before the House Ways and Means Committee. Bessent didn’t specify the exact length of the extension, which could vary from country to country.
The S&P 500 closed down by 0.27% while the Nasdaq 100 finished with a 0.37% loss.
