Riding the Economic Waves: Markets Rebound on Softened Inflation and Trade Truce

The S&P 500 and Nasdaq rose on Tuesday, driven by lower-than-expected inflation data and renewed optimism from a U.S.-China trade truce reached on Monday. Despite this, the Dow faced setbacks as UnitedHealth's significant drop overshadowed gains, following the insurance company's suspension of its annual forecast and a leadership change.

U.S. consumer prices have seen a mild rebound, with a 0.2% rise in April compared to a 0.1% dip in March. This uptick fell short of economists' expectations of a 0.3% increase. Over the past year, the Consumer Price Index (CPI) rose by 2.3% through April, a slight decrease from 2.4% previously reported in March.

In efforts to avert a global economic downturn, the U.S. and China agreed to reduce harsh tariffs, igniting a 'relief rally'. This temporary tariff reduction is set to aid in stock replenishment for retailers preparing for significant shopping periods. Consequently, various brokerages have adjusted their recession forecasts downwards. Meanwhile, sector leaders in technology bolstered market performance, while healthcare lagged.

(With inputs from agencies.)