Stock Market Today: Stocks Stable as Inflation, Tariff Fears Ebb

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The Dow Jones Industrial Average climbed above the breakeven line shortly after the noon hour Monday, boosted by an intraday rally for what remained the index's worst-performing component during a relatively quiet early summer session on Wall Street.

The S&P 500 Index held on above the psychologically significant 6,000 level, and another strong day for technology stocks elevated the Nasdaq Composite.

Investors, traders and speculators saw good inflation signs in New York Fed Survey of Consumer Expectations data as they monitor progress on U.S.-China trade war negotiations.

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National Economic Council Director Kevin Hassett said on CNBC that talks in London between top representatives of President Donald Trump and President Xi Jinping will likely result in a deal on rare earths and semiconductors before they move on to "smaller matters."

Hassett referenced the potential rollback of export controls on "other semiconductors which are also very important to China" apart from the "very, very high-end Nvidia chips" and expects "rare earths will be released in volume."

"The stock market's gains amid a steady stream of soft economic data last week suggested traders are willing to take a slowing economy in stride, as long as it doesn't slow too much," writes Chris Larkin, head of trading and investing at E*TRADE from Morgan Stanley.

Larkin notes that unless the numbers in Wednesday's release of Consumer Price Index (CPI) data for May "are a major surprise, US-China trade talks will likely assume the dominant role in shaping near-term momentum."

By the closing bell, the blue-chip Dow Jones Industrial Average was down 1.11 points to 42,761, the broad-based S&P 500 was up 0.1% at 6,005, and the tech-heavy Nasdaq Composite had climbed 0.3% to 19,591.

The well-traveled Dow Jones stock

Travelers (TRV) was the worst-performing Dow Jones stock Monday – it was down 3.9% less than 90 minutes after the opening bell, stayed in the red all day and closed with a loss of 2.2%.

But TRV did stage a 1.9% intraday rally to help lift the 30-stock index into positive territory. The insurance giant remains among those good stocks to buy to cope with inflation.

Indeed, TRV (a total return of 65.3%) has outperformed the Dow (37.9%) and the S&P (52.6%) and basically held serve with the Nasdaq (65.5%) over the trailing three years ending June 6.

Boeing (BA) was the No. 1 Dow stock Monday with a gain of 3.2%, the airplane maker in turnaround closing at its highest level since January 2024, according to Dow Jones Market Data.

BA is up 22.3% since reporting expectations-beating first-quarter earnings April 23. Boeing would also benefit from a continuing detente in the U.S.-China trade war, as tariffs make its jets unaffordable for Chinese customers.

Meanwhile, Nvidia (NVDA, +0.6%) extended its post-earnings rally and closed the gap on global market capitalization leader Microsoft (MSFT, +0.5%). NVDA is now up 5.1% since May 28.

Among other Mag 7 stocks, Amazon.com (AMZN, +1.6%), Alphabet (GOOGL, +1.5%) and Tesla (TSLA, +4.6%) were up in the market cap standings.

Apple (AAPL, -1.2%), with expectations somewhat subdued as its Worldwide Developer Conference gets underway, was the third-worst Dow Jones stock and one of only two Mag 7 stock to post a loss Monday.

Meta Platforms (META, -0.5%) was the other.

Inflation expectations ebb

The New York Fed's Center for Microeconomic Data reported Monday morning that inflation expectations have reversed their post-Liberation Day surge.

One-year-ahead inflation expectations declined by 0.4 percentage point to 3.2%, three-year expectations were down from 3.2% to 3.0%, and five-year expectations declined from 2.7% to 2.6%.

Results of the center's Survey of Consumer Expectations also show an improved labor market outlook. Median one-year-ahead earnings growth expectations were up to 2.7% from 2.5%, while mean unemployment expectations were down from 44.1% to 40.8%.

Thirty-day fed funds futures prices reflect a 99.9% probability voting members will hold interest rates steady at the next Fed meeting June 17-18. The probability of a rate cut at the July 29-30 meeting has declined from 60% on May 9 to 16.6%.

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David Dittman is the former managing editor and chief investment strategist of Utility Forecaster, which was named one of "10 investment newsletters to read besides Buffett's" in 2015. A graduate of the University of California, San Diego, and the Villanova University School of Law, and a former stockbroker, David has been working in financial media for more than 20 years.