MARKET SNAPSHOT

U.S. stocks mostly rose, pushing the S&P 500 into positive territory for the year, as the consumer-price index showed inflation easing slightly in the 12 months through April. Treasury yields came back from morning weakness and rose again as some analysts spotted potential signs of inflationary impact from tariffs under the hood of the benign April CPI report. The improved sentiment from the report lifted oil prices. Gold prices rose as the dollar fell.

MARKET WRAPS

EQUITIES

U.S. markets closed mostly higher after the government reported good news on inflation.

The consumer-price index showed inflation easing slightly to 2.3% in the 12 months through April. That marked the slowest annual rate since early 2021 and undershot expectations that it would remain at 2.4%. Investors and analysts said the report was positive, but cautioned that it was too soon to say how President Trump's trade policies would affect prices.

The S&P 500 added 0.7% and Nasdaq Composite rose 1.6%, extending Monday's rally on the heels of the U.S.-China tariff thaw. The S&P is now slightly positive on the year, after spending the past two months in the red. The Dow Jones Industrial Average lost 0.6%, dragged lower by United Health.

"Investors are trying to get back aligned with a growth narrative," said Robert Haworth, senior investment strategist at U.S. Bank Asset Management. "This is a market still waiting for news and clarity, but in the meantime, the worst-case scenario seems to be off the table."

Earlier Tuesday, China's benchmark Shanghai Composite climbed 0.2%. The Shenzhen Composite Index, however, slipped 0.2%. ChiNext Price Index gave back 0.1%. Hong Kong's Hang Seng declined 1.7%.

Japan's Nikkei 225 index climbed 1.4%.

Australian stocks increased for the fifth straight session, with the S&P/ASX 200 gaining 0.4%.

New Zealand stocks continued their upward trend, with the S&P/NZX 50 increasing by 0.9%.

COMMODITIES

Oil futures rose for a fourth straight session on improved sentiment after the U.S. and China trade agreement, which has eased concerns about loss of demand at a time when OPEC+ is raising output.

Prices got an additional lift from a Republican House budget proposal to earmark $1.3 billion to buy oil for the U.S. Strategic Petroleum Reserve, and from President Trump's call on Iran to reach a nuclear deal or face maximum pressure, Mizuho's Robert Yawger said.

Wednesday's U.S. inventory report is in view, with the EIA expected to report a 1.8 million barrel decline in crude stocks, according to a Wall Street Journal survey of analysts.

WTI climbed 2.8% to $63.67 a barrel, and Brent rose 2.6% to $66.63 a barrel.

Questions about the longevity and future prospects of a U.S.-China trade deal gave gold a boost, with the front-month gold futures contract closing up 0.6% to $3,240.30 a troy ounce.

"Despite the de-escalation in tensions between the U.S. and China, questions remain regarding the longevity of the agreement, which could maintain gold's attractiveness as a safe-haven asset," Quasar Elizundia of Pepperstone said.

TODAY'S TOP HEADLINES

Mild April Inflation Captures Early Stages of Tariff Effects

Inflation was relatively mild in April, but economists said tariffs will end a recent lull and push up more prices in the coming months.

The consumer-price index rose a seasonally adjusted 0.2% in April, the Labor Department said Tuesday. Analysts interpreted the report as good news primarily because it didn't reveal bad news, including meaningful effects of higher tariffs that could show up later this summer. That month-over-month reading matched the forecasts of economists polled by The Wall Street Journal.

"You can't take a lot of comfort in this report," said Andy Schneider, U.S. economist at BNP Paribas.

China Exults in Trump's Tariff Pullback

SINGAPORE-A U.S.-China agreement to pause bruising tariffs was cheered in Beijing as vindication for leader Xi Jinping and his defiant response to President Trump's trade war, while providing a much-needed boost to China's ailing economy.

During talks in Geneva this past weekend, U.S. and Chinese officials put the brakes on a spiraling trade war between the world's two largest economies. They agreed to a 90-day pause on most of the tariffs they had imposed on each other since April and pledged further negotiations.

Xi had directed an uncompromising response to Trump's tariffs, retaliating with a range of economic countermeasures and whipping up nationalist fervor against what Beijing denounced as American bullying.

Worried About the Economy, America's Small Businesses Are Reducing Investment and Hiring, Survey Shows

The mood on Main Street continues to worsen as unpredictable trade policy and a loosening labor market weighs on America's small businesses, according to a monthly survey.

The National Federation of Independent Business said Tuesday that its optimism index, a gauge of sentiment among small firms, fell to 95.8 in April from 97.4 in March, keeping the index below the 98 mark that represents the long-term average for confidence among small companies.

Economists had expected a slightly sharper fall in the survey, according to a poll compiled by The Wall Street Journal ahead of the release. Still, the deteriorating mood cements the sharp reversal in confidence from the burst of optimism that followed President Trump's convincing victory in November's presidential and legislative elections.

China Lifts Restrictions on Boeing Plane Deliveries

China has reopened itself to Boeing, the biggest U.S. exporter, after the two nations reached a temporary truce in their trade war.

Reversing an earlier restriction, Beijing has told the country's airlines that they can take delivery on pre-existing Boeing jet orders, according to people familiar with the situation.

The government last month told Chinese carriers they had to seek additional approval before taking delivery of Boeing aircraft they had already ordered, in effect halting deliveries to one of Boeing's biggest markets.

UnitedHealth CEO Is Out, Sending Shares Plummeting

UnitedHealth Group said Chief Executive Andrew Witty stepped down for "personal reasons" after presiding over a punishing period for the company, including a steep drop in its shares after its quarterly earnings last month fell significantly short of investors' expectations.

Effectively immediately, Chairman Stephen Hemsley will return to running the healthcare giant he helped build.

The earnings miss pushed UnitedHealth shares down by more than a third, resulting in the loss of about $190 billion in market capitalization.

Microsoft Slashing Thousands of Workers, Including Management Jobs

Microsoft is laying off thousands of employees across various divisions around the world in an effort to shed layers of management.

Less than 3% of the software giant's workforce would be eliminated, or fewer than 6,800 employees. The company had about 228,000 full-time workers worldwide as of June 30.

Microsoft said the layoffs were driven by efforts to become more streamlined and have fewer managers.