The S&P 500 closed lower on Wednesday, ending a three-day winning streak. Traders weighed a preliminary U.S.-China trade agreement and new inflation data. The S&P 500 lost 0.27% to end the day at 6,022.24.
The Dow Jones Industrial Average fell 0.5% to 19,615.88. The Nasdaq Composite shed a mere 1.1 points, closing at 42,865.77. Consumer Price Index (CPI) data showed that inflation in May rose less than expected.
It only increased by 0.1% from April, compared to the 0.2% estimate from economists polled by Dow Jones. Core CPI, which excludes volatile food and energy prices, also increased by 0.1%, falling short of expectations. Alexandra Wilson-Elizondo, global co-CIO of multi-asset solutions at Goldman Sachs Asset Management, said, “Inflation in May was lower than anticipated, suggesting the tariffs aren’t having a large immediate impact because companies have been using existing inventories or slowly adjusting prices due to uncertain demand.”
Discussions between U.S. and Chinese officials have been a key focus for investors who are on edge regarding trade policy.
Officials reached a preliminary framework but said they will seek approval from the U.S. and Chinese presidents before implementing it. As part of the agreement, China would export rare earth minerals while the U.S. would roll back restrictions on advanced technology sales to China. U.S. crude oil futures rose more than 4% Wednesday due to escalating tensions in the Middle East.
Crude futures surged $2.90, or 4.34%, to close at $69.77 per barrel.
s&p 500 ends winning streak
The U.S. is preparing a partial evacuation of its embassy in Iraq due to increased security risks in the region.
The U.S. military has also authorized the “voluntary departure” of troops’ dependents from the Middle East due to rising tensions with Iran. Jefferies turned positive on J.M. Smucker a day after the food company reported a fiscal fourth-quarter revenue miss and issued disappointing full-year earnings guidance. The stock tumbled 15.6% as a result on Tuesday, but analyst Scott Marks upgraded shares to ‘buy’ from ‘hold’ and lowered the price target to $115 per share from $118 per share, suggesting nearly 22% upside from Tuesday’s close.
Marks believes the company’s full-year guidance is conservative and that J.M. Smucker’s portfolio remains growth advantaged compared to peers. Baird downgraded shares of UnitedHealth to a neutral rating based on a more pessimistic outlook on OptumHealth, UnitedHealth’s healthcare services subsidiary. The firm lowered its 12-month price target to $312 from $356.
UnitedHealth has faced significant challenges this year, including a historic cyberattack, higher-than-expected medical costs, and public backlash following the murder of UnitedHealthcare CEO Brian Thompson. The $39 billion 10-year Treasury auction showed healthy demand, providing some relief to investors concerned about global demand for government assets. The yield came in at 4.221%, which was 7 basis points below the level when issued.
The level of direct and indirect bidding accounted for 91% of the auction, marking the most robust participation since February 2023. Lockheed-Martin slumped as much as 7% after the Pentagon cut its request for new F-35 fighter jets in half, from 48 to 24 planes. Bethesda, Maryland-based Lockheed has trailed the wider market since late 2025, falling more than 10% over the past six months, compared to the S&P 500’s decline of less than 1%.
Commerce Secretary Howard Lutnick stated that U.S. tariffs on Chinese imports will not change from their current levels, even as a trade agreement framework is being finalized.
