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Wall Street pulls back after three-day rally

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Markets cool as trade deal details emerge and inflation slows
Wall Street took a breather on Wednesday as investors digested fresh inflation data and the contours of a new trade agreement between the US and China. The S&P 500 dipped 0.27% to close at 6,022.24, snapping a three-day winning streak. The Nasdaq Composite fell 0.5% to 19,615.88, while the Dow Jones ended virtually flat, down just 1.1 points at 42,865.77.
Inflation data eases pressure on the Fed
New inflation figures released on Wednesday showed the Consumer Price Index rose just 0.1% in May, undercutting forecasts of a 0.2% increase. Core inflation, which strips out food and energy prices, also came in softer than expected.
The relatively tame data suggests that President Trump’s recent tariffs have not yet driven a spike in consumer prices—likely due to companies relying on existing inventories and holding off on price adjustments amid uncertain demand.
Trade talks yield framework deal, tariffs hold steady
Investors were also closely watching developments in the long-running US–China trade dispute. A preliminary agreement was reached in London after two days of talks, though it awaits final sign-off from Presidents Trump and Xi Jinping.
Under the deal, China has agreed to resume exports of rare earth minerals and magnets, while the US will maintain its current tariff levels—effectively 55% on Chinese imports.
Europe mixed; UK hits record high
In Europe, the Stoxx 600 closed 0.19% lower as uncertainty around the US–China agreement lingered. However, the UK’s FTSE 100 bucked the trend, rising 0.13% to a record 8,864.35, driven by optimism around housing investment and interest rate cuts.
Commodities and the dollar
Geopolitical risk sent crude prices sharply higher. WTI jumped 4.6% to US$67.97, while Brent rose 4.1% to US$69.61 after the US ordered partial evacuations from its embassy in Iraq due to rising security threats tied to Iran.
Spot gold is trading 0.86% higher at US$3,352.31 an ounce.
Gold futures (COMEX) are trading 0.93% higher at US$3,374.50 an ounce.
One Australian dollar is buying 65.02 US cents.

Futures
The SPI futures are pointing to an 18 point rise.

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