MARKET SNAPSHOT

U.S. stocks closed mostly higher as economic indicators showed no major signs of negative effects from tariffs. U.S. inflation has yet to show signs of impact from tariffs, while activity indicators softened, all contributing to a decline in Treasury yields. Oil prices continued lower after President Trump voiced optimism about a nuclear deal with Iran. Gold prices gained as the dollar declined.

MARKET WRAPS

EQUITIES

U.S. stocks were mostly higher after Walmart said it will raise prices in response to tariffs, a move that stands to ripple through the retail industry and the U.S. economy.

The Dow industrials rose 0.7%. The S&P 500 gained 0.4%. The Nasdaq Composite lost 0.2%.

Across the broader economy, a new report showed retail sales grew just 0.1% in April, slowing from 1.7% a month earlier.

In general, companies today lack the pricing power to raise prices to a point that would trigger post-pandemic levels of inflation, which would otherwise strain the economy, said Megan Horneman, chief investment officer at Verdence Capital Advisors.

"Consumers are slowing down and stretched," she said. "While inflation is a risk, I'm not worried about the type of inflation we got after Covid because I just don't think consumers will pay it and the companies will have to absorb that."

Earlier Thursday, Chinese stocks fell. Still, they appear attractive considering the government's supportive fiscal measures, Amundi's Nicholas McConway said.

The Shanghai Composite Index lost 0.7%. The Shenzhen Composite Index ended 1.4% lower while the ChiNext Price Index dropped 1.9%. Hong Kong's Hang Seng Index gave back 0.8%.

Japan's Nikkei 225 index dropped 1%.

Australian stocks continued higher, with the S&P/ASX 200 gaining 0.2% for its seventh straight session of increases.

Stocks in New Zealand rose, as the S&P/NZX 50 climbed 0.8%.

COMMODITIES

Oil futures posted back-to-back losses as President Trump expressed optimism about reaching a nuclear deal with Iran. On top of that, the IEA forecasted a looser supply and demand balance this year despite a slight uptick in its demand growth forecast.

Citi analysts cited the probability of a U.S.-Iran nuclear deal in keeping their second quarter and third quarter averages at $62 and $63 a barrel, respectively.

"Though if talks fall through and the situation escalates, oil could move to $70+," they added.

WTI gave back 2.4% to settle at $61.62 a barrel, and Brent fell 2.4% to $64.53 a barrel.

Gold held above the $3,200 a troy ounce-mark, following a Wednesday slide.

After a record-breaking first half of the year, analysts expect the second half of the year to be tougher and "provide ammunition to gold bears," said Hamad Hussain of Capital Economics.

Front-month gold climbed 1.2% to $3,220.70 per troy ounce.

TODAY'S TOP HEADLINES

Wholesale inflation shows biggest decline since 2020, but the good news is unlikely to last

The numbers: Wholesale prices posted the biggest drop in April since the pandemic in 2020, but economists say the decline in inflation appeared to be a one-off that might not be sustained if tariffs persist at current levels.

The producer price index dropped 0.5% last month, the government said, but the decline was largely tied to falling egg and gasoline prices and a quirky category that measures certain business profit margins.

Trump Says U.S., Iran Close to Nuclear Deal

American negotiators for the first time pitched a nuclear proposal to their Iranian counterparts, according to people briefed on the matter, days before President Trump said the U.S. was close to an agreement on the matter on Thursday.

The U.S. issued its proposal last weekend during the fourth round of nuclear negotiations between the U.S. and Iran since April 12. After those talks, the U.S. said it was encouraged by Iran's openness to Washington's approach. The Iranians said the talks were "difficult but useful" in clarifying the differences.

The Iranians said they would take the U.S. proposal back to Tehran for discussion, one of the people said. Iran's Foreign Minister Abbas Araghchi said Tehran hadn't received a proposal in writing from Washington yet but was expecting one. The U.S. negotiating team didn't comment.

Walmart Becomes Biggest Retailer Yet to Pass Through Tariff Price Increases

Trade war price increases are coming for American shoppers.

Retail goliath Walmart on Thursday said it plans to raise prices this month and early this summer, when tariff-affected merchandise hits its store shelves. Some prices already have increased.

"The magnitude and speed at which these prices are coming to us is somewhat unprecedented in history," Walmart Chief Financial Officer John David Rainey said in an interview.

Retail Sales Barely Rose in April as Consumers Lose 'Will to Spend'

Retail sales edged higher again in April, but growth slowed significantly from the pace in March, when Americans went on a bit of a shopping spree ahead of expected tariff-induced price increases.

Retail sales gained 0.1% in April from March, the Census Bureau reported Thursday. Economists surveyed by FactSet had forecast that overall retail sales gained 0.2% month over month in April, a slowdown from a revised 1.7% surge in March.

Total sales were up 4.8% for the period between February and April, the bureau reported.

Powell Steers New Strategy for a World Where Very Low Rates Are No Sure Thing

Federal Reserve Chair Jerome Powell said the central bank was in the process of making adjustments to its overarching policy-setting framework to account for meaningful changes in the outlook for inflation and interest rates following the 2020 pandemic.

"The economic environment has changed significantly since 2020, and our review will reflect our assessment of those changes," Powell said Thursday.

"Framework" refers to how the Fed spells out its strategy for setting interest rates. Congress has assigned the Fed a mandate to maintain low and stable inflation while promoting healthy labor markets. How the Fed does that has largely been left up to the central bank, and since 2012, the Fed has laid out how it seeks to achieve those goals in a broader framework statement.

Meta Is Delaying the Rollout of Its Flagship AI Model

Meta is delaying the rollout of a flagship AI model, prompting internal concerns about the direction of its multibillion-dollar AI investments, people familiar with the matter said.

Company engineers are struggling to significantly improve the capabilities of its "Behemoth" large-language model, leading to staff questions about whether improvements over prior versions are significant enough to justify public release, the people said.

Early in its development, Behemoth was internally slated for an April release to coincide with Meta's inaugural AI conference for developers. Meta put out two smaller models in its Llama AI model family ahead of the event, but later pushed an internal target for the larger Behemoth's release to June. Now, it's been delayed to fall or later.

Trump Presses Apple to Bring iPhone Manufacturing to America. Wall Street Shrugs.

President Trump wants an American-made iPhone. Apple Chief Executive Tim Cook has no plans to deliver one any time soon.

Tension between the president and one of America's most valuable companies spilled into the open Thursday, when Trump chided Cook for the iPhone-maker's plans to shift final assembly for many U.S.-bound devices to India. Trump reiterated his demand that Apple bring manufacturing back to America.

"I had a little problem with Tim Cook yesterday. I said to him, 'Tim, You're my friend. I treated you very good. You're coming here with $500 billion, but now here you are building all over India,'" Trump said in Qatar.