Stock Markets Soar on Inflation Decline and Trade Truce

The S&P 500 and Nasdaq indices both ended higher for the second consecutive day on Tuesday, driven by inflation figures that were softer than expected. This positive momentum was further buoyed by news of a trade truce between the U.S. and China. However, the Dow Jones Industrial Average took a hit, primarily due to UnitedHealth's 17.8% stock plunge after announcing its forecast suspension and CEO's departure.

Market optimism was strengthened by Monday's announcement of a bilateral trade agreement between Washington and Beijing aimed at reducing tariff tensions. This agreement temporarily lowers U.S. tariffs on Chinese imports and is seen as a collaborative effort to prevent a global economic slowdown. Consequently, many financial analysts updated projections, lowering the likelihood of a U.S. recession and predicting that the Federal Reserve will maintain current interest rates until September.

Among other market movements, the technology sector was the biggest winner on the S&P 500, reflecting a 2.25% gain, while healthcare stocks suffered the most significant losses. Additionally, Coinbase Global's planned inclusion in the S&P 500 led to a nearly 24% surge in its shares. With a majority of S&P 500 companies having already reported their earnings, attention now turns to the upcoming earnings report from Walmart.

(With inputs from agencies.)