U.S. Stocks Extend Yesterday's Rally, S&P 500 Turns Positive For 2025

(RTTNews) - After moving sharply higher over the course of Monday's session, stocks turned in another strong performance during trading on Tuesday. The Nasdaq and the S&P 500 reached their best closing levels in well over two months, with the S&P 500 turning positive for 2025.

The Nasdaq and the S&P 500 pulled back off their best levels going into the end of the day but remained firmly positive. The Nasdaq jumped 301.74 points or 1.6 percent to 19,010.08 and the S&P 500 climbed 42.36 points or 0.7 percent to 5,886.55.

The narrower Dow, on the other hand, spent most of the day in negative territory before closing down 269.67 points or 0.6 percent at 42,140.43.

The continued strength in the broader markets came following the release of a Labor Department report showing consumer prices in the U.S. rose by slightly less than expected in the month of April.

The Labor Department said its consumer price index inched up by 0.2 percent in April after edging down by 0.1 percent in March. Economists had expected consumer prices to rise by 0.3 percent.

Excluding food and energy prices, core consumer prices also rose by 0.2 percent in April after creeping up by 0.1 percent in March. Core consumer prices were also expected to climb by 0.3 percent.

The report also said the annual rate of growth by consumer prices slowed to 2.3 percent in April from 2.4 percent in March, while the annual rate of growth by core consumer prices was unchanged at 2.8 percent.

The slightly tamer-than-expected inflation data eased concerns about President Donald Trump's new tariffs on U.S. trade partners leading to higher prices.

Yesterday's news about a U.S.-China trade deal slashing steep tariffs on each other's goods also contributed to the extended rally on Wall Street.

Meanwhile, a steep drop by shares of UnitedHealth (UNH) weighed on the Dow, with the healthcare giant plunging by 17.8 percent.

The nosedive by UnitedHealth came after the company suspended its full-year guidance and announced Andrew Witty is stepping down as CEO for personal reasons.

Sector News

Computer hardware and semiconductor extended the surge seen during Monday's session, contributing to the strong upward move by the tech-heavy Nasdaq.

Considerable strength was also visible among airline stocks, as reflected by the 2.9 percent jump by the NYSE Arca Airline Index.

Oil producer, networking and brokerage stocks also saw notable strength, while healthcare, biotechnology and pharmaceutical stocks showed significant moves to the downside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan's Nikkei 225 Index jumped by 1.4 percent, while Hong Kong's Hang Seng Index tumbled by 1.9 percent.

Meanwhile, European stocks moved modestly higher on the day. The German DAX Index and the French CAC 40 Index both rose by 0.3 percent, although the U.K.'s FTSE 100 Index closed just below the unchanged line.

In the bond market, treasuries saw further downside following the steep drop seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 4.2 basis points to a nearly three-month closing high of 4.499 percent.

Looking Ahead

A lack of major U.S. economic data may lead to relatively light trading on Wednesday ahead of the release of an avalanche of data on Thursday.