Stock Market Today: Stocks pause furious May rally as trade boost fades

U.S. equity futures edged lower in early Wednesday trading, while the dollar pared some of its recent gains, as investors looked to hit pause Wall Street’s solid May rally that has lifted the S&P 500 into positive territory for the year.

Stocks ended higher again on Tuesday, paced by megacap tech gains that powered the Nasdaq further into bull market territory, as the early May rally tied to U.S. trade talk progress with the United Kingdom and China continued to ignite risk appetite. 

Markets also got a boost from the softer-than-expected April inflation reading published by the Commerce Department, which showed headline pressures easing to 2.3%, the lowest in just over four years. 

The S&P 500 climbed into positive territory for the year, and its highest closing level since late February, was also reclaiming its so-called 200-day moving average, a key performance benchmark that could suggest further gains over the coming months, for the first time in thirty-two trading days.

“A lot has changed over this relatively short period as the market transitioned from the sticker shock of the White House’s April 2 reciprocal tariff announcement, retaliatory tariffs from most of our trading partners, to trade deals,” said Adam Turnquist, chief technical strategist at LPL Financial.

“While this progress has led to a likely peak in investor fear and policy uncertainty, there are still a lot of unknowns over where tariff rates will ultimately land,” he added, “However, for now, investors have embraced the de-escalatory backdrop, especially the tariff reprieve deal reached with China over the weekend.”

A light calendar of economic data on Wednesday, however, as well as Walmart  (WMT)  earnings and a speech from Federal Reserve Chairman Jerome Powell slated for Thursday, suggests a muted opening bell on Wall Street. 

The market’s key measure of equity volatility, the CBOE Group’s VIX index, is also trading near the lowest levels since late March, and at $18.40, suggests daily swings of around 1.15%, or 68 points, for the S&P 500 over the next 30 days. 

Related: Consumer-price inflation slows in April, but tariff impact on prices will linger

On Wall Street, futures contacts suggest a modest 7 point opening bell decline for the S&P 500, which is now up more than 5.7% for the month, and a 54 point pullback for the Dow Jones Industrial Average.

The tech-focused Nasdaq, meanwhile, is called 20 points lower, although Nvidia  (NVDA)  is rising again in premarket following a deal to sell Blackwell chips to Saudi Arabia’s Humain, an AI startup launched by the Kingdom’s sovereign wealth fund.

In the bond market, benchmark 10-year Treasury note yields were holding at higher levels, and last marked at 4.461% heading into the start of the New York trading session, with 2-year paper pegged at 3.992%.

The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.61% lower at 100.371.

More Economic Analysis:

• Fed inflation gauge sets up stagflation risks as tariff policies bite
• U.S. recession risk leaps as GDP shrinks
• Like it or not, the bond market rules all

In overseas markets, Europe’s Stoxx 600 was marked 0.24% lower in Frankfurt trading and on pace to snap a five-day winning streak for the regional benchmark. Britain’s FTSE 100 edged 0.06% lower in London.

Overnight in Asia, Japan’s Nikkei 225 closed 0.14% lower in Tokyo, with the country’s broader Topix index falling for the first time in two weeks, snapping its longest winning streak in nearly sixteen years. 

The regional MSCI ex-Japan benchmark, meanwhile, rose 1.77% into the close of trading on the back of solid gains for stocks in Hong Kong and South Korea. 

#Stock #Market #Today #Stocks #pause #furious #rally #trade #boost #fades