By Shashwat Chauhan and Pranav Kashyap
(Reuters) - Wall Street’s main indexes were on track for a mixed open on Tuesday, as investors assessed the latest inflation numbers and their impact on monetary policy after markets came off sharp gains from the temporary Sino-U.S. trade truce.
U.S. consumer prices rebounded moderately in April, with headline inflation increasing 0.2% last month after dipping 0.1% in March. Economists polled by Reuters had forecast that the CPI would rise 0.3%.
The CPI climbed 2.3% in the 12 months through April after advancing 2.4% in the 12-month period until March.
"In terms of inflation expectations and monetary policy, we’re very much in the same place that we were before the report came out," said Jordan Rizzuto, chief investment officer at GammaRoad Capital Partners (WA:CPAP).
"We expect the Fed to continue to be in a wait-and-see mode until we see some further materialization of pricing pressures that may come from the new trade policies."
Traders leaned into bets that the Fed would not start lowering borrowing costs until September, but still expected at least two 25-basis-point cuts by the end of the year.
A number of U.S. Federal Reserve officials are slated to speak this week, including Chair Jerome Powell on Thursday.
Weighing on Dow futures, UnitedHealth (NYSE:UNH) fell 10% before the bell after the insurance bellwether suspended its annual forecast and its CEO stepped down.
At 08:50 a.m. ET, Dow E-minis were down 162 points, or 0.38%, S&P 500 E-minis were up 4.25 points, or 0.07%, and Nasdaq 100 E-minis were up 58.75 points, or 0.28%.
Relief swept through Wall Street on Monday as all three major U.S. indexes surged after Washington and Beijing agreed to ease their tough reciprocal tariffs, signaling a cooperative effort to prevent a global economic recession.
The U.S. will pause the extra tariffs it imposed on Chinese imports to 30% from 145% for three months, while Chinese duties on U.S. imports will fall to 10% from 125% in the same period.
Following the tariff truce, Goldman Sachs became the first major brokerage to lower its probability of a U.S. recession.
The three major indexes have rebounded from losses logged since April 2, known as "Liberation Day", when President Donald Trump announced reciprocal tariffs affecting nearly all U.S. trade partners.
A 90-day pause announced on April 9 for countries other than China, along with solid earnings reports and a limited U.S.-UK trade agreement last week, helped the S&P 500 and tech-heavy Nasdaq regain lost ground.
Most megacap and growth stocks swung higher, with Nvidia (NASDAQ:NVDA) and Amazon.com (NASDAQ:AMZN) up about 1.4% each.
Crypto exchange operator Coinbase Global (NASDAQ:COIN), which is slated to join the S&P 500 on May 19, was among the top movers, jumping 10.6%.
As earnings season draws to a close with more than 90% of S&P 500 companies having reported earnings, investors now look forward to results from retail giant Walmart (NYSE:WMT), expected later this week.
Trump is on a four-day visit to the Gulf region, arriving in Saudi Arabia on Tuesday, and investors will look to see if a trade deal is in the offing.