S&P 500 closes higher Tuesday, wiping out 2025 loss, as Nvidia surges

However, Wall Street got a reprieve after the U.S. and China agreed to a 90-day tariff pause earlier this week. The news sent stocks surging on Monday, with the Dow soaring more than 1,000 points.

“Couple [the trade news] with a massive chips deal in Saudi Arabia, ticks down in inflation which will pull rates cuts closer, and substantive details of [tax cuts] — you get a full risk-on market,” said Jamie Cox, managing partner at Harris Financial Group. The White House on Tuesday announced a $600 billion investment in the U.S.

Softer inflation

Adding to Tuesday’s gains was softer-than-expected inflation data released earlier in the day.

The consumer price index, a broad measure of goods and services costs across the U.S. economy, increased 2.3% year over year in April. Economists polled by Dow Jones expected inflation to remain at a 2.4% rate last month on a year-over-year basis.

“And just like that, the markets’ twin fears — a tariff-induced recession and sticky inflation — have been greatly assuaged,” said Chris Zaccarelli, chief investment officer at Northlight Asset Management. “We’re still concerned that high valuations and market concentration remain risks to much higher stock prices this year, but in the short run, markets should love this data and continue yesterday’s (China-trade) celebration.”