US stocks popped on Wednesday as investors digested a softer-than-expected inflation reading and assessed a US-China plan to salvage their trade truce.
The Dow Jones Industrial Average ( ^DJI ) rose about 0.3%, or 150 points, while the S&P 500 ( ^GSPC ) was up 0.1%. The tech-heavy Nasdaq Composite ( ^IXIC ) also climbed about 0.1%.
Recently, the S&P 500 and Nasdaq Composite have risen to within striking distance of record closing highs amid optimism for potential trade deals.
Before the open, markets gave a muted response to a US-China framework agreement to get the Geneva tariff truce back on track. Trump and other US officials indicated the deal should resolve issues between the two countries on rare earths and magnets. Trump said Wednesday that the US will allow Chinese students in US colleges, a sticking point that had emerged in the weeks following the countries' mid-May deal in Geneva. However, the deal was seen as lacking detail about export curbs and tariff levels.
Read more: The latest on Trump's tariffs
Stocks revived somewhat after a better-than-expected reading of the May Consumer Price Index (CPI) before the bell. Consumer inflation was up 0.1% month over month, Bureau of Labor Statistics data showed, compared with the 0.2% rise expected and the 0.2% increase in April.
On a "core" basis, which excludes volatile food and energy costs, May CPI rose 2.8% year over year, matching April's rate. Monthly core prices increased 0.1%, versus a 0.2% gain the prior month. Heading into the report, economists had expected growth of 2.9% year over year and 0.3% month over month.
The data was in focus ahead of the Federal Reserve's next monetary policy decision on June 18. Odds of a September interest rate cut increased following the release, with markets pricing in a 57.2% chance versus 53.5% a day before, per the CME FedWatch tool.
The Russell 2000 ( ^RUT ) index, which is sensitive to interest rates, rose about 0.4% in early trading Wednesday.
On the corporate front, Tesla ( TSLA ) shares rose more than 1% in afternoon trade after CEO Elon Musk backed off his feud with Trump, saying some of his posts about the president "went too far." Musk also set a tentative June 22 date for the launch of Tesla's robotaxi services.
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