S&P 500, Nasdaq end higher on soft inflation data, trade optimism

THE S&P 500 and the Nasdaq closed higher on Tuesday for a second straight day after softer-than-expected inflation numbers added to investor optimism from Monday when the US and China announced a trade truce.

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The Dow fell, however, with its biggest drag a 17.8% slide in shares of UnitedHealth after the insurance bellwether suspended its annual forecast and its chief executive officer stepped down.

The S&P 500 closed with a year-to-date gain for the first time since late February after data showed that US consumer prices rebounded moderately in April, with headline inflation increasing 0.2% last month compared with economist estimates for a 0.3% increase and a 0.1% drop in March.

The consumer price index (CPI) climbed 2.3% in the 12 months through April, after advancing 2.4% in the 12-month period until March.

"The sustainability of the carry-through from yesterday is positive. There was nothing in CPI to throw it off," said Carol Schleif, chief market strategist at BMO Private Wealth in Minneapolis.

Monday's relief rally followed Washington and Beijing's agreement to dial back stringent reciprocal tariffs, signaling a joint effort to stave off a global economic downturn.