The S&P 500 (SPX) has given up all of its morning gains as inflation remains above the Fed’s 2% target.
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June’s Consumer Price Index (CPI) inflation report showed a 0.3% month-over-month rise and a 2.7% year-over-year rise. Both figures matched the consensus estimate, although YoY inflation has accelerated from 2.4% in May and 2.3% in April.
“Fed should cut Rates by 3 Points. Very Low Inflation. One Trillion Dollars a year would be saved!!!” said Trump in a Truth Social post following the release of the data. The odds of a 25-bps rate cut at the July 29-30 Federal Open Market Committee (FOMC) are now at just 2.6% compared to 6.2% yesterday and 23.0% a month ago.
Meanwhile, the U.S. has inked a trade deal with Indonesia, just one week after Trump warned that the country would face 32% tariffs on August 1. The U.S. will place a 19% tariff on Indonesian goods while Indonesia will have no tariffs on U.S. goods. In addition, Indonesia will purchase from the U.S. $15 billion worth of energy, $4.5 billion of agriculture, and 50 Boeing (BA) planes.
The S&P 500 is down by 0.02% at the time of writing.
Which Stocks are Moving the S&P 500?
Let’s take a look at TipRanks’ S&P 500 Heatmap, which illustrates the stocks that have contributed to the index’s price action.
Nvidia (NVDA) has reached a new all-time high after the semiconductor company announced that the U.S. government would allow it to sell its H20 GPUs to China in a sign of easing tensions between the two world powers. Advanced Micro Devices (AMD) and Broadcom (AVGO) are rising in sympathy on the news.
Excluding Citigroup (C), the financial sector is dragging the benchmark index down following disappointing earnings from Wells Fargo (WFC) and BlackRock (BLK). Citigroup bucked the trend, with its earnings beating on both revenue and EPS. C stock is now trading at its highest level since 2008.
Healthcare, real estate, and basic materials stocks are also performing poorly on Tuesday.
SPY Stock Moves Lower with the S&P 500
The SPDR S&P 500 ETF (SPY) is an exchange-traded fund designed to track the movement of the S&P 500. As a result, SPY moves in tandem with the SPX.
Wall Street expects further upside for SPY. During the past three months, analysts have issued an average SPY price target of $676.63 for the index, implying upside of 8.33% from current prices. The 504 stocks in SPY carry 425 buy ratings, 73 hold ratings, and 6 sell ratings.