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
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
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
-
Original Medicare vs Medicare Advantage Quiz: Which is Right for You?Quiz Take this quick quiz to discover your "Medicare Personality Type" and learn whether you are a Traditionalist, or a Bundler.
-
Ask the Editor: Capital Gains and Tax PlanningAsk the Editor In this week's Ask the Editor Q&A, Joy Taylor answers questions on capital gains tax rates and end-of-year tax planning
-
Time Is Running Out to Make the Best Tax Moves for 2025Don't wait until January — investors, including those with a high net worth, can snag big tax savings for 2025 (and 2026) with these strategies.
-
Time Is Running Out to Make the Best Moves to Save on Your 2025 Taxes
Don't wait until January — investors, including those with a high net worth, can snag big tax savings for 2025 (and 2026) with these strategies.
-
4 Smart Ways Retirees Can Give More to Charity, From a Financial AdviserFor retirees, tax efficiency and charitable giving should go hand in hand. After all, why not maximize your gifts and minimize the amount that goes to the IRS?
-
I'm an Insurance Pro: If You Do One Boring Task Before the End of the Year, Make It This One (It Could Save You Thousands)Who wants to check insurance policies when there's fun to be had? Still, making sure everything is up to date (coverage and deductibles) can save you a ton.
-
Small Caps Hit a New High on Rate-Cut Hope: Stock Market TodayOdds for a December rate cut remain high after the latest batch of jobs data, which helped the Russell 2000 outperform today.
-
What Investors May Face in the New Year: InterviewKeith Lerner, the chief market strategist and chief investment officer for Truist Wealth, speaks with Kiplinger.
-
3 Year-End Tax Strategies for Retirees With $2 Million to $10 MillionTo avoid the OBBB messing up your whole tax strategy, get your Roth conversions and charitable bunching done by year's end.
-
'Politics' Is a Dirty Word for Some Financial Advisers: 3 Reasons This Financial Planner Vehemently DisagreesYour financial plan should be aligned with your values and your politics. If your adviser refuses to talk about them, it's time to go elsewhere.
-
For a Move Abroad, Choosing a Fiduciary Financial Planner Who Sees Both Sides of the Border Is CriticalWorking with a cross-border financial planner is essential to integrate tax, estate and visa considerations and avoid costly, unexpected liabilities.
