U.S. stocks dip as investors weigh inflation, China-U.S. trade talks
NEW YORK, June 11 (Xinhua) -- U.S. stocks ended lower on Wednesday, as investors reacted to a softer-than-expected inflation report and weighed tentative progress in trade negotiations between the United States and China.
The Dow Jones Industrial Average dipped just 1.10 points, essentially flat, to close at 42,865.77. The S&P 500 declined 16.57 points, or 0.27 percent, to 6,022.24, while the Nasdaq Composite lost 99.11 points, or 0.50 percent, ending at 19,615.88.
Losses were broad but modest across sectors. Consumer discretionary and materials stocks led the declines, falling 1.02 percent and 0.98 percent, respectively. Energy stocks gained 1.49 percent, supported by higher oil prices, while utilities rose 0.05 percent.
Markets showed a muted response as China and the United States concluded their trade talks in London.
China and the United States have over the past two days conducted professional, rational, in-depth and candid exchanges, Li Chenggang, China international trade representative with the Ministry of Commerce and vice minister of commerce, said Tuesday.
The two sides have agreed in principle the framework for implementing the consensus between the two heads of state during their phone talks on June 5, as well as those reached at the Geneva talks, Li said.
China reiterates that the United States should work with China to honor their words with actions, and demonstrate sincerity in keeping commitments and concrete efforts to implement consensus, so as to jointly safeguard the hard-won outcomes of dialogue, Chinese Vice Premier He Lifeng said.
Earlier in the day, stocks had briefly rallied after the U.S. consumer price index (CPI) for May came in below expectations. Headline inflation rose just 0.1 percent from April, compared to forecasts of a 0.2 percent increase. Core CPI, which strips out volatile food and energy prices, was up 2.8 percent year over year, matching April's pace. On a monthly basis, core prices also rose 0.1 percent, down from 0.2 percent the previous month.
The inflation data raised investor hopes that the Federal Reserve may cut interest rates later this year. According to the CME FedWatch Tool, the odds of a September rate cut rose to 57.2 percent, up from 53.5 percent just a day earlier. Treasury yields dropped in response, with the 10-year yield easing to 4.41 percent.
"Combined with the solid May jobs report, the CPI data reduce the chances of a nasty bout of stagflation," Bank of America US economist Stephen Juneau wrote in a note to clients on Wednesday.
However, American economist Claudia Sahm, speaking to Yahoo Finance, cautioned against reading too much into the latest inflation figures. "This report doesn't necessarily tell us where we're headed by the end of the year," she said, adding that the economic effects of the Trump administration's current trade policies are still unfolding.
In corporate news, mega-cap tech stocks were mostly lower, with Apple and Amazon each down about 2 percent, while Nvidia, Alphabet and Meta each dropped about 1 percent. Chip giant Broadcom was up 3.38 percent, while Microsoft and Tesla rose slightly.
Intel tumbled 6.46 percent to lead S&P 500 decliners, giving back most of the big gains posted on Tuesday. Shares of Advanced Micro Devices were down 1.7 percent ahead of the company's "Advancing AI" event on Thursday.
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