S&P 500 rebounds as Nvidia boosts tech shares amid easing U.S.-China trade tensions and softer inflation data.
In Short:
The S&P 500 rose 1% on Tuesday, buoyed by improving U.S.-China trade relations and strong performances from companies like Nvidia. Despite some concerns about high valuations, analysts showed cautious optimism for continued market growth due to positive economic data and government investments.
The S&P 500 rose on Tuesday, returning to positive territory for the year as easing U.S.-China trade tensions boosted investor confidence.
The index gained 1%, with the Nasdaq Composite increasing 1.8%. The Dow Jones Industrial Average fell by 166 points, or 0.3%, due to an 18% drop in UnitedHealth shares.
Nvidia’s stock led the market, advancing 6% after announcing the shipment of 18,000 artificial intelligence chips to Saudi Arabia. This news positively impacted peer companies such as Broadcom and AMD, which increased by around 4%.
Following this rally, the S&P 500 is now up 0.2% for 2025, after previously being down over 17% due to trade uncertainties. The market responded positively to news of a 90-day tariff pause between the U.S. and China, which contributed to a significant surge in stock prices.
Market analysts noted that improved sentiment stems from several factors, including the chip deal, easing inflation pressures, and anticipated tax cuts. The White House also announced a $600 billion investment in the U.S. economy.
In addition to the trade news, softer-than-expected inflation data in April, which reported a 2.3% increase in the consumer price index, further energised the market. Economists had predicted a 2.4% rate.
Investment experts express cautious optimism, acknowledging ongoing concerns surrounding high valuations and market concentration, but suggest that current data may lead to continued market growth in the short term.
