The S&P 500 rose on Tuesday, erasing its losses for 2025. Tech stocks led the rally as inflation eased in April. The index jumped 0.7%, while the Nasdaq Composite surged 1.8%.
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However, the Dow Jones Industrial Average fell 0.6%. Nvidia shares powered the tech rally, soaring nearly 6%. Tesla and Meta also saw significant gains of about 5% and 3%, respectively.
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The Consumer Price Index for April showed the slowest annual inflation rate since 2021. Markets are now pricing in a rate cut by the Federal Reserve in September. UnitedHealth faced turmoil as its CEO stepped down unexpectedly.
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The company’s stock plunged 12%.
Tech stocks drive S&P 500 recovery
Palantir shares jumped about 9% after a $142 billion US defense deal with Saudi Arabia was announced.
Coinbase stock surged more than 18% after being added to the S&P 500. President Trump called for a rate cut following the inflation report. He argued that lower rates would benefit the US economy.
Wall Street strategists are increasingly bullish on the S&P 500’s outlook for the year. Goldman Sachs raised its year-end target to 6,100, while Yardeni Research boosted its projection to 6,500. Boeing shares hit 52-week highs after China allowed airlines to take delivery of its planes.
Saudi Arabia’s sovereign wealth fund also ordered up to 30 Boeing 737 Max jets. The S&P 500 has turned positive for the year, erasing its 15% year-to-date losses in less than six weeks. This marks the fastest recovery from such a decline since 1982.
