Wall Street Pulls Back Ahead of Key Inflation Data After Historic Rally

After a historic rally on Monday fueled by a U.S.-China agreement to slash tariffs for 90 days, U.S. stock futures are down as traders turn their attention to the April Consumer Price Index (CPI) report, due at 8:30 AM ET. Tech and crypto stocks saw outsized moves, but caution prevails as investors brace for fresh inflation data that could influence interest rate expectations.

What Sparked the Rally? 🎉

• Tariff Truce: The U.S. and China agreed to reduce tariffs for the next 90 days. This surprise move gave investors hope that a full-blown trade war might be avoided (at least for now).
• Tech Takes Off: Major tech stocks like Amazon, Apple, and Meta all jumped 5% or more. Coinbase, the cryptocurrency exchange, soared after news it will join the S&P 500.

Why Are Investors Nervous Now? 😬

• Inflation Watch: The next big test is the April Consumer Price Index (CPI) report, coming out today at 8:30 AM ET. This report will show if prices are rising faster because of the new tariffs.
• Fed in the Spotlight: If inflation is higher than expected, the Federal Reserve might delay any interest rate cuts, which could slow down the stock market’s momentum.

What’s Next? 📅

• Earnings Season Winding Down: Most big companies have already reported their results, so investors are now focused on economic data and trade headlines.
• Volatility Ahead? Even with Monday’s gains, the S&P 500 is still about 5% below its all-time high. If inflation surprises or trade talks hit a snag, we could see more ups and downs.

Bottom Line 💡 The market is bouncing back, but the next few days are crucial. Keep an eye on Tuesday’s inflation report and ongoing trade news-they’ll set the tone for what’s next!