US equities rallied Tuesday on the back of a softer-than-expected April inflation reading and a tariff truce between the US and China. The S&P 500 closed higher for the second straight session, wiping out year-to-date losses — the benchmark is now up 0.1% for the year. The rebound comes as a welcome reversal from the steep market sell-off triggered by the announcement of US President Donald Trump’s “Liberation Day” tariffs on 2 April, which had dragged the S&P down as much as 15% YTD.

Inflation slowed, and tariff pressure eased: Annual inflation slowed to 2.3% in April, down from 2.4% in March, and slightly below forecasts. Consumer prices climbed 0.2% m-o-m in April — also below forecasts — up from a 0.1% drop in March, according to data from the US Bureau of Labor Statistics. “There was nothing in CPI to throw it off,” BMO Private Wealth’s strategist Carol Schleif told Reuters. The CPI data landed just a day after Washington and Beijing announced they would temporarily pause their trade war for 90 days, dialing back trade tensions that have weighed on markets for months.

Market reax: The S&P 500 rose 0.7%, notching a YTD gain for the first time since February. The tech-heavy Nasdaq inched up 1.6%, while the Dow Jones fell 0.6%, dragged by a 17.8% drop in UnitedHealth.

Sentiment shifts fast, but some remain cautious: The truce between the US and China on the tariffs front was akin to going “from iceberg to 80 degrees spring day overnight” said Schleif, pointing out that the news would help retailers stack up imports ahead of the holidays and the new academic year. “There’s been an instant reversal in the prevailing trends of the last several months,” Putnam Investments’ Shep Perkins told the Financial Times, calling the truce a “big positive surprise.”

Still, others warned the rebound may be overblown: “Relief from policy-inflicted stress may be bullish at the margin, but it does not strengthen the economy or reverse the global slowdown that was already under way,” said BCA Research’s Felix-Antoine Vezina-Poirier, warning that a global 10% tariff would remain a “stagflationary drag.”

MARKETS THIS MORNING-

Asian markets are mixed in early trading this morning. Japan’s Nikkei is down 0.6% and the Shanghai Composite is down 0.1%, while the Hang Seng (1.2%) and Korea’s Kospi (0.7%) are in the green.

TASI

11,532

+0.4% (YTD: -4.2%)

MSCI Tadawul 30

1,475

+0.4% (YTD: -2.3%)

NomuC

27,929

+2.1% (YTD: -11.3%)

USD : SAR (SAMA)

USD 3.75 Sell

USD 3.75 Buy

Interest rates

5.0% repo

4.5% reverse repo

EGX30

31,693

+0.4% (YTD: +6.6%)

ADX

9,631

-0.1% (YTD: +2.3%)

DFM

5,363

+0.5% (YTD: +4%)

S&P 500

5,887

+0.7% (YTD: +0.1%)

FTSE 100

8,603

-0.02% (YTD: +5.3%)

Euro Stoxx 50

5,416

+0.4% (YTD: +10.6%)

Brent crude

USD 66.63

+2.6%

Natural gas (Nymex)

USD 3.61

-0.9%

Gold

USD 3,260

+0.4%

BTC

USD 103,987

+1.2% (YTD: -1.2%)

Sukuk/bond market index

912.71

-0.1% (YTD: +1.2%)

S&P MENA bond & sukuk

143.04

-0.3% (YTD: +2.2%)

VIX (Fear gauge)

18.22

-0.9% (YTD: +5%)

THE CLOSING BELL: TADAWUL-

The TASI rose 0.38% yesterday on turnover of SAR 5.4 bn. The index is down 4.2% YTD.

In the green: Sarco (+9.9%), Zamil Industrial (+7.7%) and Artex (+4.4%).

In the red: Gulf General (-6.5%), Alkhaleej Trading (-5.1%) and Saudi Re (-3.8%).

THE CLOSING BELL: NOMU-

The NomuC rose 2.14% yesterday on turnover of SAR 65.2 mn. The index is down 11.3% YTD.

In the green: AME (+12.8%), United Mining (+10%) and Albattal Factory (+9.4%).

In the red: iOud (-13.7%), Munawla (-6.3%) and Almohafaza for Education (-6.3%).

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