Most US stocks rose Tuesday following an encouraging report that showed inflation unexpectedly slowed across the country last month.
The S&P 500 rose by 0.7 percent, following a larger increase earlier in the week after the US and China declared a 90-day hiatus in their trade conflict to facilitate negotiations.
The Dow Jones Industrial Average dropped 269 points, or 0.6 percent, while the Nasdaq composite surged 1.6 percent as AI and other tech stocks paved the way.
“I think investors are aware that the trade deal is not done yet,” said Louis Wong, director for Phillip Securities Group in Hong Kong.
“I would advise investors to remain cautious in the near term and to be prepared for unexpected news from the trade front,” he added.
On Wall Street, Coinbase Global soared 24 percent after learning that its stock will be included in the widely monitored S&P 500 index next week. Consequently, many investment funds will also add it before trading starts on Monday.
Coinbase will replace Discover Financial Services, which is getting bought by Capital One Financial.
Stocks in the artificial-intelligence industry were also strong. Nvidia rose 5.6 per cent and was the biggest single force pushing upward on the S&P 500. It’s partnering with Saudi Arabia’s sovereign wealth fund-owned AI startup Humain to ship 18,000 chips to the Middle Eastern nation to help power a new data center project.
Super Micro Computer, which builds servers used in AI, jumped 16 per cent. GE Vernova, which is hoping to power vast AI data centers, rose 4%. Palantir Technologies gained 8.1 per cent.
They helped offset UnitedHealth Group, whose shares tumbled 17.8 per cent after it suspended its full-year financial forecast due to higher-than-expected medical costs. The nation’s largest health insurer also announced that CEO Andrew Witty was stepping down for personal reasons and that Chairman Stephen Hemsley will become CEO, effective immediately.
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UnitedHealth was the main reason the Dow lagged behind other U.S. stock indexes.
All told, the S&P 500 rose 42.36 points to 5886.55. The Dow Jones Industrial Average fell 269.67 to 42,140.43, and the Nasdaq composite climbed 301.74 to 19,010.08.
In the bond market, Treasury yields ticked higher with hopes for the US economy. The yield on the 10-year Treasury rose to 4.48 per cent from 4.45 per cent late Monday.
The two-year Treasury yield, which moves more closely with expectations for Fed action, ticked up to 4.01 per cent from 3.98 per cent.
In stock markets abroad, indexes rose across much of Europe and Asia. Stocks fell 1.9 per cent in Hong Kong but rose 1.4 per cent in Tokyo.
Automakers were among the big gainers in Japan. Nissan Motor Co. added 3 per cent ahead of an announcement that it plans to lay off 20,000 of its workers as part of its restructuring efforts. The automaker said Tuesday that it racked up a loss of 670.9 billion yen ($7.03 billion) in the last fiscal year.
