Markets rebound as trade tensions ease
Wall Street climbed higher Tuesday, as easing trade tensions between the US and China helped lift sentiment and push the S&P 500 into positive territory for 2025. The S&P gained 0.72% to close at 5,886, while the Nasdaq surged 1.6%, ending above 19,000 for the first time since March. The Dow bucked the trend, slipping 0.64%, dragged lower by a sharp decline in UnitedHealth.
The upbeat tone follows Monday’s rally after the White House announced a 90-day pause on new tariffs. The market had been under pressure earlier this year from Trump’s broad import duties and fears of retaliatory measures.
Markets were also buoyed by President Trump’s announcement of a sweeping US$600 billion investment pledge from Saudi Arabia. The package, unveiled at a joint forum in Riyadh, spans defence, artificial intelligence, energy, and infrastructure, and includes the largest arms deal in US history.
Nvidia leads tech gains after Saudi AI deal
Semiconductor stocks once again led the charge. Nvidia jumped 5.6% after announcing it will send 18,000 of its top-tier Blackwell chips to Saudi Arabia’s new AI venture, Humain. The deal, backed by the kingdom’s sovereign wealth fund, represents one of the largest AI hardware orders on record.
Broadcom and AMD also climbed, rising 5% and 4% respectively.
Coinbase spikes on S&P 500 inclusion
One of the day’s biggest movers was Coinbase Global. The crypto exchange surged nearly 24% after being named to the S&P 500, replacing Discover Financial. The inclusion, effective next Monday, is expected to generate as much as $9 billion in passive inflows from index-tracking funds. That mechanical buying helped drive Coinbase to its best day since November, when Trump’s election win first ignited optimism about a crypto-friendly administration.
UnitedHealth plunges on CEO exit and profit warning
But not all the news was positive. UnitedHealth Group tumbled almost 18% after CEO Andrew Witty abruptly resigned and the company withdrew its 2025 outlook. Former CEO Stephen Hemsley will return to lead the insurer through a challenging period marked by rising Medicare costs, a surprise earnings miss, and at least two federal investigations. The fallout dragged down other health insurers, with Cigna and Humana both lower on the day.
Cooling inflation offers brief reprieve
Meanwhile, the latest inflation report offered modest relief. Consumer prices rose just 0.2% in April, bringing the year-on-year figure to 2.3%—its lowest since early 2021. While economists warn that Trump’s new tariffs could drive prices higher this summer, for now the data supports a more patient stance from the Federal Reserve.
Markets have pushed back expectations for rate cuts, now pricing in the first move in September rather than June.
Commodities and the dollar
WTI crude is trading 2.73% higher at US$63.64 a barrel.
Brent crude is trading 2.42% higher at US$66.53 a barrel.
Spot gold is trading 0.46% higher at US$3251.40 an ounce.
One Australian dollar is buying 64.7 US cents.
Futures
The SPI futures are pointing to a 17 point rise.
