Markets Climb as Trade Truce and Low Inflation Boost Investor Confidence

The S&P 500 and Nasdaq surged for the second consecutive day, driven by unexpectedly low inflation figures and renewed optimism following the announcement of a trade truce between the U.S. and China. This positive market movement persisted despite a downturn in the Dow Jones, affected primarily by UnitedHealth's share drop after the company suspended its annual forecast and its CEO resigned.

Carol Schleif, BMO Private Wealth's chief market strategist, credited the trade agreement's timing as crucial for retailers preparing for back-to-school and holiday shopping seasons. The tariff halt by Washington and Beijing is perceived as a robust effort to prevent a global economic slowdown.

The technology sector experienced the most significant gains, providing a substantial lift to the markets, while healthcare shares underperformed. Investors are observing the Federal Reserve's next moves, anticipating two potential interest rate cuts by year-end. This comes as Fed Chair Jerome Powell is set to provide further insights on the economic outlook later in the week.

(With inputs from agencies.)