The stock market showed a mixed picture as investors weighed easing inflation against renewed concerns over US-China trade tensions. The S&P 500 dipped 0.1% and the Nasdaq Composite fell 0.3%, while the Dow Jones Industrial Average managed a 0.1% gain. Traders are grappling with President Trump’s latest remarks on China “totally violating its agreement,” which reignited tariff fears, alongside cooling inflation data that showed the core PCE index rose 0.1% month-over-month, aligning with forecasts and suggesting price pressures are moderating. Year-over-year core PCE inflation dropped to 2.5% from 2.7%, potentially easing pressure on the Federal Reserve to hike rates further. This dual narrative creates a complex environment for traders today. The legal landscape for tariffs is also in focus, with the White House facing a Monday deadline to respond to a court ruling. Despite Friday’s choppiness, May is closing with solid gains: the S&P 500 is up 6% for the month, the Dow has gained 4%, and the Nasdaq has surged nearly 10%, boosted by a tech rebound. Looking at individual stocks, Regeneron Pharmaceuticals plunged over 17% on disappointing trial results for a lung disease drug, while Ulta Beauty rose 7% after strong earnings. Consumer sentiment showed signs of stabilization in May, breaking a four-month decline. Moving forward, traders will be closely watching US-China developments and assessing how the Fed interprets the latest inflation data.
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