Stocks opened cautiously higher Tuesday as market participants took in the latest inflation data and the unofficial start of second-quarter earnings season. But enthusiasm waned as the session wore on, with two of the three main benchmarks closing in negative territory.
Ahead of the open, data from the Bureau of Labor Statistics showed the Consumer Price Index (CPI) rose 0.3% month over month in June and 2.7% year over year. This was quicker than what was seen in May but in line with economists' forecasts.
Core CPI, which excludes volatile food and energy costs, was also higher than the month prior, but matched consensus estimates.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Some "goods" areas, such as furniture, appliances and electronics, saw rising prices and were likely a result of tariff pass-throughs, says John Luke Tyner, portfolio manager and fixed income analyst at Aptus Capital Advisors.
As for the positives in the June CPI report, Tyner points to "continued softening in shelter, car insurance and airfares," which helps "alleviate service pressures that have been problematic over the last several years."
Tyner adds that while tariffs haven't lifted inflation as much as feared just yet, it's still above the Federal Reserve's 2% target and is unlikely to change the central bank's stance on keeping interest rates unchanged.
Indeed, futures traders are currently pricing in a 97% chance the Fed holds rates steady at its next policy meeting in late July.
MP Materials jumps on big Apple deal
In single-stock news, MP Materials (MP) shares soared 20.0% after the mining company announced a $500 million deal with Apple (AAPL).
Under the terms of the agreement, MP will provide the tech giant with rare earth magnets that are manufactured in the U.S. from 100% recycled materials.
MP Materials is the only rare earth producer in the U.S., and the magnets are critical in consumer electronics, including smartphones and computers.
"This collaboration deepens our vertical integration, strengthens supply chain resilience, and reinforces America's industrial capacity at a pivotal moment," said MP Materials CEO James Litinsky.
Nvidia rally sends Nasdaq to new high
Apple, for its part, rose 0.2% – but it was hardly the best blue chip stock today. That honor went to Nvidia (NVDA), which rallied 4.0% on news the semiconductor manufacturer will be allowed to sell its H20 artificial intelligence (AI) chips in China.
NVDA shares went into a tailspin earlier this year after the Trump administration ramped up restrictions on China. But the chip stock has rebounded in recent months and last week, became the first company to top a $4 trillion market cap.
Nvidia's gain helped keep the Nasdaq Composite above water today, with the tech-heavy index climbing 0.2% to 20,677 – a new all-time closing high.
However, the Dow Jones Industrial Average shed 1% to 44,023 and the S&P 500 fell 0.4% to 6,243 due in part to weakness in financial stocks.
Bank stocks hold back the S&P 500
Among the day's most notable decliners was Wells Fargo (WFC), which plunged 5.5% after earnings.
While the big bank beat top- and bottom-line Q2 estimates, it lowered its full-year net interest income guidance.
"The good news was bad loans were down indicating more stable credit quality allowing for better than expected profits," says Brian Mulberry, senior client portfolio manager at Zacks Investment Management.
And while Mulberry says that weakness in the NII segment "is a concern in the short term," this pressure could lift if interest rates move lower later this year.
Wells Fargo wasn't alone in its post-earnings weakness. JPMorgan Chase (JPM, -0.8%) and BlackRock (BLK, -5.8%) also fell in the wake of their Q2 results.
Related content
-
Honeywell Leads Dow Higher: Stock Market TodayOil prices got a lift after the Treasury Department announced new sanctions on Russia's two largest oil companies.
-
The OBBB Ushers in a New Era of Energy Investing: What You Need to Know About Tax Breaks and MoreThe new tax law has changed the energy investing landscape with expanded incentives and permanent tax benefits for oil and gas production.
-
Dow Beats 334-Point Retreat on Tech Bite: Stock Market TodayInvestors, traders and speculators wonder whether this remains a Magnificent 7 market and how long this AI-driven bull run will last.
-
What the Rich Know About Investing That You Don'tPeople like Warren Buffet become people like Warren Buffet by following basic rules and being disciplined. Here's how to accumulate real wealth.
-
Ten Ways Family Offices Can Build Resilience in a Volatile WorldFamily offices are shifting their global investment priorities and goals in the face of uncertainty, volatile markets and the influence of younger generations.
-
3M, GM, Blue Chips Lead to the Upside: Stock Market TodayThe S&P 500 followed the Dow Jones Industrial Average into green territory, but the Nasdaq lagged the other indexes because of its tech exposure.
-
Should Your Brokerage Firm Be Your Bookie? A Financial Professional Weighs InSome brokerage firms are promoting 'event contracts,' which are essentially yes-or-no wagers, blurring the lines between investing and gambling.
-
Supermarkets Have Become a Pickpockets' Paradise: How to Avoid Falling VictimSome stores regularly rearrange inventory with the aim of increasing purchases, and they're creating opportunities for thieves to steal from customers.
