FX.co ★ US Stocks Dip as Rally Stalls, Trade Uncertainty Lingers

In the afternoon trading session, U.S. stocks experienced a downturn as investors took a breather to evaluate the recent market rally, despite the release of lower-than-anticipated inflation figures and a preliminary trade agreement between the U.S. and China. The S&P 500 and Nasdaq indexes saw declines of 0.3% and 0.5%, respectively, while the Dow Jones Industrial Average remained stable, with traders opting to secure their gains after a series of robust performances. For the month of May, the Consumer Price Index recorded a modest increase of 0.1% compared to the previous month—falling short of predictions—which, alongside lower-than-expected core inflation, eased the Federal Reserve's imperative to raise interest rates. Concurrently, U.S. and Chinese officials have preliminarily agreed to recommence trade discussions, with China consenting to provide rare earth materials and the U.S. set to relax student visa restrictions. Nevertheless, details surrounding tariffs and export limitations were notably absent, leading to tempered investor optimism. President Trump deemed the framework "complete" pending final approval, while Commerce Secretary Howard Lutnick mentioned that a decision could be reached within a matter of days. The materials and consumer discretionary sectors underperformed, whereas the energy sector registered gains.