NEW YORK: The dollar fell and major US stock indexes rose on Tuesday (May 13) on news that US consumer inflation picked up less than expected in April when President Donald Trump unveiled a raft of tariffs that have wreaked havoc on global markets.
European shares edged higher for a fourth straight session, and global equities also gained.
Crude oil prices rose, boosted by a temporary cut in US-China tariffs.
The US and China said on Monday they would pause their trade war for 90 days, bringing down reciprocal duties and removing other measures while they negotiate a more permanent arrangement.
The agreement has reignited investor appetite for stocks, cryptocurrencies and commodities and Tuesday’s inflation figures helped power that move.
The Bureau of Labor Statistics said its consumer price index rose 0.2 per cent in April, bringing the annual increase down to 2.3 per cent from 2.4 per cent.
Economists polled by Reuters had forecast a monthly rise of 0.3 per cent and a yearly rise of 2.4 per cent.
The report was good news, said Bill Adams, chief economist for Comerica Bank in Dallas, in a note. “Inflation should be manageable for most consumers and businesses in 2025.”
The S&P 500 and the Nasdaq advanced on the softer-than-expected inflation numbers and easing of US-China trade tensions. The S&P 500 rose 42.36 points, or 0.72 per cent, to 5,886.55 and the Nasdaq Composite rose 301.74 points, or 1.61 per cent, to 19,010.09.
The Dow Jones Industrial Average fell 269.67 points, or 0.64 per cent, to 42,140.43, under pressure from UnitedHealth’s slide after the company suspended its annual forecast and its CEO stepped down.
The dollar pulled back from sharp gains in the prior session on the inflation data. It was last down 0.79 per cent against a basket of currencies.
