S&P500 turns positive on a 2025 scale. Nasdaq at highest level since February

Tuesday's session on Wall Street ended with a predominance of gains among the main indices, and the S&P 500 recovered its losses and is in the black counting from the beginning of 2025. The leader of growth among technology companies was Nvidia.

The Dow Jones Industrial at the close fell 0.64 percent, to 42,140.43 points. The S&P 500 at the end of the day was up 0.72 percent, at 5,886.55 points. The Nasdaq Composite was up 1.61 percent, at 18,010.09 points. The Russell 2000 mid-cap index was up 0.74 percent, at 2,107.70 points. The VIX index was down 0.92 percent, at 18.23 points.

Nvidia shares rose 5.6% on news the company would ship its top AI chips to Saudi Arabia. Shares of rivals also rose, with Broadcom and AMD each gaining about 4%.

The increases were driven by weaker-than-expected inflation data released earlier in the day. US consumer prices rose 2.3% YoY in April and 0.2% MoM. Expectations were +2.4% YoY and +0.3% MoM. Core inflation was 0.2% MoM and 2.8% YoY. Expectations were 0.3% MoM and 2.8% YoY.

Investors are assessing news about U.S.-China relations. U.S. Treasury Secretary Scott Bessent said Tuesday that the trade talks with China have resulted in a mechanism for avoiding escalation in bilateral relations. Over the weekend, U.S. and Chinese delegations agreed that starting Wednesday, the two countries would cut mutual tariffs by 115 percentage points for 90 days.

Goldman Sachs economists lowered their estimated risk of a U.S. recession to 35% from 45% after the announcement of a 90-day U.S.-China tariff cut. Goldman Sachs Group strategists led by David Kostin raised their three-month target for the S&P 500 to 5,900. That suggests an increase of less than 1% from current levels.

Analysts said while the 90-day break was welcome, it didn’t change the bigger picture. “ The challenges are not over. The de-escalation was much stronger than expected, but you have to remember that the U.S. economy is still struggling with average effective tariffs of over 13% ,” said Frederique Carrier, head of investment strategy at RBC Wealth Management.

“We have to remember that average US tariffs are still at levels not seen since 1941. There are still concerns about a slowdown in trade,” said Nick Saunders, chief executive of leading stock trading platform Webull UK.

On Thursday, markets will be watching the speech of US Federal Reserve Chairman Jerome Powell. According to data collected by LSEG, investors expect the US Federal Reserve to make two 25-basis-point rate cuts by the end of 2025, with the first cut coming in September.

Investors are now waiting for signals on potential trade deals during Donald Trump's four-day visit to the Gulf region . The US president will arrive in Saudi Arabia on Tuesday.

Earnings season is drawing to a close, with more than 90% of S&P 500 companies having already released their first-quarter reports, while retail giant Walmart is due to release its results later this week.

In the United States, the optimism index among small businesses fell to 95.8 points in April from 97.4 points a month earlier, the National Federation of Independent Business (NFIB) reported. Analysts had expected the index at 95.0 points.

On the oil market, WTI futures for May are up 2.78 percent to USD 63.67 per barrel, while June Brent futures are up 2.46 percent to USD 66.56 per barrel. (PAP Biznes)

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