The rose Tuesday, clawing back into positive territory for the year as investors extended the sharp gains seen in the previous session due to easing U.S.-China trade tensions.

The broad market index gained 0.72% to close at 5,886.55, while the climbed 1.61% to end at 19,010.08. The lagged, losing 269.67 points, or 0.64%, as a nearly 18% drop in shares of pressured the benchmark.

Shares of advanced 5.6% on news the company would send 18,000 of its to Saudi Arabia. Peer chip stocks rose alongside the AI darling, with rising nearly 5% and adding 4%.

Tuesday's gain put the S&P 500 up about 0.1% for 2025. At one point, the index was down more than 17% for the year, as trade tensions dented investor confidence in equities.

However, Wall Street got a reprieve after the U.S. and China agreed to a 90-day tariff pause earlier this week. The news sent stocks surging on Monday, with the Dow soaring more than 1,000 points.

"Couple [the trade news] with a massive chips deal in Saudi Arabia, ticks down in inflation which will pull rates cuts closer, and substantive details of [tax cuts] — you get a full risk-on market," said Jamie Cox, managing partner at Harris Financial Group. The White House on Tuesday announced a

Softer inflation

Adding to Tuesday's gains was softer-than-expected inflation data released earlier in the day.

The , a broad measure of goods and services costs across the U.S. economy, increased 2.3% year over year in April. Economists polled by Dow Jones expected inflation to remain at a 2.4% rate last month on a year-over-year basis.

"And just like that, the markets' twin fears — a tariff-induced recession and sticky inflation — have been greatly assuaged," said Chris Zaccarelli, chief investment officer at Northlight Asset Management. "We're still concerned that high valuations and market concentration remain risks to much higher stock prices this year, but in the short run, markets should love this data and continue yesterday's (China-trade) celebration."

S&P 500 closes higher, turns positive for the year

Continuing investor optimism toward cooling trade tensions between the U.S. and China helped push the S&P 500 into the green for the year.

The broad market index advanced 0.72% to close at 5,886.55. The S&P 500 now has a gain of 0.08% in 2025.

The Nasdaq Composite gained 1.61% to finish the session at 19,010.08, while the Dow Jones Industrial Average slipped 269.67 points, or 0.64%, to 42,140.43.

— Brian Evans

Effective U.S. tariff rate at 15% unlikely to cause U.S. or global recession, Capital Economics says

An effective U.S. tariff rate of 15% on all imports — the highest since the Great Depression but down from a threatened 27% "at the height of this year's trade war" — is unlikely to cause either a U.S. or a global recession, according to Capital Economics.

With so many exemptions — for smartphones and semiconductors — and rebates — for parts and materials for cars assembled in the U.S. — in place, group chief economist Neil Shearing and chief global economist Jennifer McKeown now see world GDP expanding a little less than 3% in both 2025 and 2026, "a bit softer than usual but by no means a disaster."

Still, London-based Capital Economics warns of multiple "potential flashpoints that might cause a re-escalation of the trade war," among them:

• the expiration on July 8 of the original pause on reciprocal tariffs
• the Aug. 12 expiration of the pause on reciprocal tariffs on China
• the challenge the U.S. faces in negotiating trade agreements with more than 180 nations in the next two months
• difficulty negotiating with the European Union due to its large trade surplus and "need to govern by consensus"
• failure in U.S.-China talks to address exchange rate policy, market access or industrial policies

"[T]here are several ways in which the uneasy truce that has emerged over the past few weeks could unravel," the economists wrote.

— Scott Schnipper

U.S.-China tariff agreement doesn't suggest 'trade normalization,' Fitch says

The recent agreement between the U.S. and China to isn't a sign of "trade normalization" between the two countries, ratings agency Fitch said Tuesday.

"In the absence of a lasting deal, uncertainty over where tariff rates will settle and the impact of those already implemented will remain key factors in our macroeconomic forecasts," Fitch said in a . "Nor does the U.S.-China agreement mean the trade war, which is already having a tangible economic impact, is over."

That comes a day after Fitch said the new trade agreement puts the U.S. effective tariff rate, or ETR, at , down from about 23% prior to the agreement.

"While this would imply a smaller hit to global growth, all else equal, it would still be far higher than the 2.3% U.S. ETR in 2024, with a near-universal 10% tariff and some higher sector-specific tariffs still in place," the agency added.

— Sean Conlon

Stocks making midday moves

Here are some of the stocks moving in midday trading:

• — The chipmaker popped more than 6% after more than 18,000 of its artificial intelligence chips to Saudi Arabian company Humain.
• — The stock rose nearly 12% after the company posted an earnings and revenue beat.
• — The insurance stock sank 16% after the company said CEO Andrew Witty is . UnitedHealth also pulled its 2025 guidance partly due to higher medical costs.

To see more stocks making midday moves, .

— Michelle Fox

Nvidia shares rally, putting stock on track to reenter the exclusive $3 trillion club

shares jumped more than 6% on Tuesday after CEO Jensen Huang to Saudi Arabian firm Humain.

Huang's announcement was made as part of a White House-led trip to the region that included President Donald Trump and other tech CEOs. Nvidia said its first deployment will use its GB300 Blackwell chips, some of its most advanced chips that were officially announced earlier this year. The chips will be used in a 500 megawatt data center in Saudi Arabia.

Nvidia's recent surge has put the stock on track to close above a $3 trillion market cap for the first time since Feb. 28. The company has overtaken Apple to be the world's second-most-valuable name, just behind .

Nvidia shares have gained more than 20% this month. Still, the stock is in the red for the year and remains about 14% below its year high.

— Pia Singh

Chip stocks are at a key technical level, Wolfe says

Chip stocks are trading near a key chart area, making the group a potential bellwether for the rest of the market, according to Wolfe Research technical analyst Rob Ginsberg.

"One group we will be watching closely in the days ahead will be the semiconductors. Now on the cusp of overbought at absolute and relative resistance, their ability to brush it aside and punch through will be an interesting tell for risk assets broadly," Ginsberg wrote in a note to clients.

The rose more than 6% on Monday and closed at its highest level since February.

— Jesse Pound

HSBC downgrades shares of Chevron on lower share buyback

shares could see reduced upside from here following its recent share buyback cut, according to HSBC.

Analyst Kim Fustier downgraded shares of the energy giant to hold from buy and slashed its price target. Its updated target implies more than 11% upside from Monday's closing level.

The downgrade comes after Chevron announced earlier this month that it is amid declining crude prices. The company said it plans to repurchase between $2.5 billion and $3 billion of its stock during the second quarter, less than its first-quarter repurchase of $3.9 billion.

"We downgrade Chevron from Buy to Hold on lower shareholder distributions after the company cut buybacks with 1Q results," the analyst wrote Tuesday. "We previously saw Chevron trading roughly on a par with European oil majors on total distribution yield, but this is no longer the case after the buyback cut. The latter was increasingly anticipated in the market and Chevron's shares have underperformed key peer Exxon in the past month as oil prices fell."

Chevron has risen more than 5% over the past month, while has advanced 6% during that period. However, both names have lagged the broader market, as the has seen a one-month advance of about 9%.

— Sean Conlon

Coinbase's entry into S&P 500 is a watershed moment for crypto industry, analysts say

shares rallied 19% Tuesday, erasing the stock's year-to-date loss.

The move came after S&P Dow Jones Indices announced the crypto exchange operator will be before trading begins on May 19, replacing . 

"Coinbase has gone from being in an intense litigation with the SEC just a few months back (later dropped by the SEC under the Trump regime) to being the latest addition to S&P 500," said Bernstein analyst Gautam Chhugani. "This event symbolizes the dramatic turnaround in fortunes for the crypto industry and its rising significance as the frontier of financial innovation."

The development also has positive implications for investors, analysts said Tuesday morning. For more, read our full story .

— Tanaya Macheel

VIX below 18 for first time since late March

The , fell again on Tuesday, bringing it back below 18 for the first time since March 27. The index, which is seen by many as a measure of fear in the market, last traded around 17.82.

The VIX had soared as high as 60.13 in early April as investors worried that rising trade tensions would knock the economy into a recession.

— Fred Imbert

White House announces $600 billion investment in U.S. from Saudi Arabia

The Trump administration on Tuesday said Saudi Arabia has committed to investing $600 billion in the U.S., with the funds focused on segments including technology and defense.

"The deals celebrated today are historic and transformative for both countries and represent a new golden era of partnership between the United States and Saudi Arabia," the White House said in a .

— Brian Evans

UnitedHealth shares at lowest level since February 2021

shares tumbled 13% to trade at lows not seen since February 2021. The sell-off came after the company said for "personal reasons" and suspended its 2025 forecast.

Witty will act as a senior advisor to his successor, Stephen Hemsley, who served as UnitedHealth Group's CEO from 2006 to 2017.

The company said its decision to pull its guidance was partly due to higher medical costs, which dragged down other insurance stocks.

— Yun Li

Johnson & Johnson downgraded by Leerink to market perform

A proposed rule from the Centers for Medicare & Medicaid Services is bad news for 's Darzalex Faspro therapy, according to Leerink Partners. The draft says combination treatments are protected for 13 years from the date the original compound was approved, not when the combination therapy was cleared for use.

"Darzalex Faspro may be price controlled in 2029 rather than 2034 as we had been assuming," wrote analyst David Risinger, as he downgraded J&J stock to market perform from outperform and brought the stock's price target to $153 from $169. The pair is used to treat multiple myeloma.

Johnson & Johnson's stock fell nearly 2% at the market open. The stock is up more than 6% year to date.

The ruling could also hurt the outlook for , which was downgraded to underperform from market perform. Shares cratered about more than 14% at the market's open. The stock has been a strong performer in 2025, with a 39% gain year to date.

— Christina Cheddar Berk

S&P 500 opens near the flatline

The S&P 500 opened near the flatline on Tuesday as investors slowed down bets on risk assets following a strong rally to start the week.

The broad market index gained 0.1%, while the Nasdaq Composite added 0.4%. The Dow Jones Industrial Average slipped 198 points, or 0.4%.

— Brian Evans

China lifts ban against Boeing, report says

China has put an end to its ban on deliveries of aircrafts, according to Bloomberg, which cited people familiar with the matter.

The move comes after the U.S. and China came to an agreement to temporarily cut back their tariffs. Domestic airlines and government agencies are being told this week that the deliveries can begin again at their discretion, the report said.

Shares of Boeing rose 1.5% in premarket trading.

— Michelle Fox

CPI rises less than expected in April

Consumer prices rose slightly less than expected in April, a welcomed report for investors worried about persistent inflation. The consumer price index while economists polled by Dow Jones anticipated a 2.4% advance. Month over month, CPI climbed 0.2%, matching expectations.

Economists polled by Dow Jones expected CPI to rise 0.2% month over month and 2.4% year over year.

— Fred Imbert

See the stocks moving before the bell

These are some of the stocks moving in Tuesday's premarket:

• — Shares tumbled 7% after the health insurer said it was suspending its 2025 outlook due to higher-than-expected medical expenditures. Additionally, UnitedHealth announced CEO Andrew Witty was stepping down, effective immediately, for personal reasons.
• — The quantum firm plunged more than 11% after recording $1.5 million for first-quarter revenue, below the $2.6 million consensus forecast from analysts surveyed by FactSet. However, Rigetti earned 13 cents in earnings per share, while analysts penciled in a loss of 5 cents per share.
• — Shares surged 9.2% following the announcement that the crypto trading platform will join the S&P 500, taking effect before trading on May 19. Coinbase will replace Discover Financial Services.

— Alex Harring

Inflation data won't show tariff impact until at least June or July, Siegel says

The U.S. is likely to see a rise in inflation from even the reduced tariffs, but it likely won't show up in Tuesday morning's data, according to Wharton professor emeritus Jeremy Siegel.

"I don't think we're going to be seeing the effects of this tariff until maybe June or July, because so little actually did come into this country and then get priced at the retail level and then sampled by the government officials to get in," Siegel said on "."

Siegel, who also serves as senior economist at Wisdom Tree, did say he believes the inflation impacts of tariffs will be short-lived and that the Federal Reserve should not overreact.

"Long-term inflation rate indicators are not going up, and the Fed should not be reacting against a supply shock," Siegel said.

— Jesse Pound

Investors should remain flexible as markets likely to remain range bound, says Wells Fargo

Wall Street still has ample headwinds to contend with even as Trump temporarily slashed stiff tariffs on China, according to Wells Fargo.

"Despite the sharp rebound in more risk assets, markets are by no means out of the woods, and we expect more volatility along with some resistance as investors continue to evaluate the tariff situation and its impact on the global economy and corporate earnings," Wells Fargo Investment Institute global equity strategist Chris Haverland wrote in a Monday note.

"We recommend a nimble approach to rebalancing for all major asset classes, as we anticipate range- bound markets toward year end," he added.

— Brian Evans

UnitedHealth falls after suspending 2025 outlook, CEO stepping down

Shares of dropped 7% in the premarket Tuesday after the company announced it is suspending its 2025 outlook due to higher-than-expected medical expenditures.

Additionally, UnitedHealth announced CEO Andrew Witty was stepping down, effective immediately, for personal reasons. Stephen Hemsley replaces Witty as chief executive.

— Fred Imbert

Asia-Pacific markets trade mixed after Wall Street's massive rally on U.S.-China trade deal

Asia-Pacific markets traded mixed Tuesday, following Wall Street's massive rally on the back of a between the U.S. and China, which includes a 90-day pause on tariffs and a drop in reciprocal tariffs by 115 percentage points.

Hong Kong stocks fell sharply, with the  declining 1.87% — its sharpest drop in nearly a month — to close at 23,108.27, while the Hang Seng Tech Index plunged 3.26% to 5,269.66. This was a reversal from the strong gains both indexes logged in the previous session. Meanwhile, mainland China's  index ended the day 0.15% higher at 3,896.26.

Indian markets fell with the benchmark  down 1.27% while the BSE Sensex lost 1.49% as of 1:42 p.m. local time. This is a reversal from the significant gains in the previous session, when Indian markets posted their , following optimism over the .

Over in Japan, the pared gains to 1.43% to end the day at 38,183.26. This marks the benchmark's fourth consecutive positive session. Meanwhile, the broader Topix index advanced 1.10% to 2,772.14, making this its 13th straight day of gains.

South Korea's  closed flat at 2,608.42, while the small-cap Kosdaq added 0.89% to 731.88.

In Australia, the benchmark rose 0.43% to end the day at 8,269.

— Amala Balakrishner

SoftBank Vision Funds swing to annual loss

's Vision Fund business on Tuesday posted a loss in the fiscal year that ended in March as it booked slowing gains at its massive tech investment arm.

SoftBank said it notched a gain on investment at its Vision Funds of 434.9 billion yen in the fiscal year, a 40% fall from the 724.3 billion yen booked in the previous year.

The Vision Fund segment overall logged a pretax loss of 115.02 billion yen, or $777.7 million, versus a profit of 128.2 billion yen in the previous fiscal year.

— Arjun Kharpal

Goldman cuts recession risk to 35% from 45% after Chinese tariff pause

Economists at Goldman Sachs cut their estimated risk of a recession in the U.S. to 35% from 45% after President Donald Trump's temporary pause on Chinese tariffs.

"In light of the somewhat smaller hit to GDP growth, the reduced risk of US-China tariffs high enough to cause production disruptions, and the encouraging signal about future tariff policy decisions, we are lowering our 12-month recession probability to 35% (vs. 45% previously)," the firm wrote in a note to clients.

Goldman said the Trump administration is likely to announce other preliminary trade deals over the next few weeks, which might lower the U.S. effective tariff rate slightly further.

— Yun Li, Michael Bloom

Stocks making moves after the bell

Check out the companies making headlines after the bell: 

•  — The electric air taxi company's shares climbed nearly 5% in after-hours trading after a better-than-feared quarterly report. Archer Aviation posted a net loss of $93.4 million, narrower than a FactSet consensus estimate of a $116.9 million loss.
• — The quantum computing firm saw shares tumbling more than 13% in extended trading after the company's first-quarter sales fell short of estimates. Rigetti's revenue of about $1.5 million came way below a FactSet consensus estimate of $2.6 million.
• — The crypto exchange surged 8% in after-hours trading. Coinbase will , replacing Discover Financial Services. The change will before the start of trading on May 19. Discover is in the process of by Capital One Financial.

— Yun Li