The S&P 500 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 0.7%, while the Nasdaq Composite climbed 1.4%, aided by a more than 5% rise in shares of Nvidia. Meta Platforms was also among Tuesday’s outperformers, rising more than 2%, along with Netflix. Amazon shares were also up 2%.
The Dow Jones Industrial Average lagged, losing 171 points, or 0.4%, as a 16% drop in UnitedHealth pressured the benchmark.
Tuesday’s gain put the S&P 500 up 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.
+45.17 (+0.77%)However, Wall Street got a reprieve this week 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 $600 billion investment in the U.S.
Softer inflation
Adding to Tuesday’s gains was softer-than-expected inflation data released earlier in the day.
The consumer price index, a broad measure of goods and services costs across the U.S. economy, increased 2.3% on an annualized basis 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.”
HSBC downgrades shares of Chevron on lower share buyback
Chevron 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’s slowing the pace of its share buybacks 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 on 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 Exxon has advanced 6% over that time period. However, both names have lagged the broader market, as the S&P 500 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
Coinbase shares rallied 19% Tuesday, erasing the stock’s year-to-date loss.
The move came after S&P Dow Jones Indices announced that the crypto exchange operator will be added to the benchmark S&P 500 stock index before trading begins on May 19, replacing Discover Financial Services.
“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 here.
— Tanaya Macheel
VIX below 18 for first time since late March
The CBOE Volatility Index, or VIX, 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.
-0.36 (-1.96%)— 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 statement.
— Brian Evans
UnitedHealth shares at lowest level since February 2021
UnitedHealth Group shares tumbled 13% to trade at lows not seen since February 2021. The sell-off came after the company said CEO Andrew Witty is stepping down 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 Johnson & Johnson‘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 Halozyme Therapeutics, 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 Boeing aircrafts, according to Bloomberg, which cited people familiar with the matter.
The move comes after the United States 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 increased 2.3% year over year, 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:
- UnitedHealth — 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.
- Rigetti Computing — 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.
- Coinbase — 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