Context:

The S&P 500 has successfully eliminated all losses for the year, spurred by positive market developments including reduced trade tensions between the US and China, and cooling inflation data. While the S&P 500 rose by 0.72% and the Nasdaq Composite gained 1.61%, the Dow fell by 0.64%, influenced by UnitedHealth Group's significant drop following its earnings guidance suspension and CEO departure. A notable market uplift was seen after a 90-day tariff reduction agreement between Washington and Beijing, and consumer prices recorded the lowest annual increase since February 2021. Nvidia experienced a substantial boost, increasing by 5.63% due to its new partnership with Saudi Arabia on AI initiatives. The market's recovery from early April's downturn is attributed to easing fears of recession and improved trade relations, as highlighted by Chris Zaccarelli, Chief Investment Officer at Northlight Asset Management.

Dive Deeper:

• The S&P 500 has managed to erase all the previous losses of the year due to a combination of easing trade tensions and cooling inflation, which have positively influenced investor sentiment.

• A significant boost in stock markets occurred following an agreement between Washington and Beijing to reduce tariffs for 90 days, which came alongside promising inflation data indicating the lowest annual increase in consumer prices since February 2021.

• Despite the general upward trend, the Dow Jones index dropped by 0.64%, largely due to a sharp decline in UnitedHealth Group's stock, which fell by 17.8% after the company suspended its earnings guidance and announced the CEO's resignation.

• Nvidia's shares rose by 5.63% after the announcement of a new partnership with Saudi Arabia focused on artificial intelligence, showcasing the market's positive reception to tech sector developments.

• The market's rebound from early April's concerns about recession and slowing growth, fueled by punitive tariffs, has been bolstered by changing trade policies and unexpected favorable inflation data.

• The Nasdaq Composite saw a gain of 1.61%, marking positive movement in the tech-heavy index, while the Dow remained down for the year by 0.95% and the Nasdaq by 1.56%.

• Chris Zaccarelli of Northlight Asset Management noted the market's recovery was supported by the pause in tariffs and a breakthrough in Chinese trade relations, which lifted the last major concern overhanging the market.