U.S. stock markets closed mixed on Tuesday following hotter-than-expected key inflation data. Market participants also weighed developments in the Middle East geopolitical conflicts and the upcoming U.S.-China summit meet. The Dow ended in positive territory while both the S&P 500 and the Nasdaq Composite finished in negative territory.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) rose 0.1% to close at 49,760.56. Notably, 19 components of the 30-stock index ended in positive territory while 11 ended in negative territory. The major gainer of the blue-chip index was UnitedHealth Group Inc. (UNH Quick QuoteUNH - Free Report) . 

The stock price of the health insurer giant was up 3.1%. UnitedHealth Group currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The tech-heavy Nasdaq Composite finished at 26,088.20, slipping 0.7% or 185.92 points due to the weak performance by technology bigwigs, especially AI giants. The S&P 500 fell 0.1% to finish at 7,400.96. However, six out of 11 sectors of the broad-market index ended in positive territory while five ended in negative territory. 

The Communication Services Select Sector SPDR (XLC) and the Consumer Staples Select Sector SPDR (XLP) declined 1.2% and 1%, respectively. On the other hand, the Energy Select Sector SPDR (XLE), the Industrials Select Sector SPDR (XLI), the Materials Select Sector SPDR (XLB) and the Information Technology Select Sector SPDR (XLK) rose 2.6%, 1.3%, 1.3% and 1.1%, respectively.

The fear gauge CBOE Volatility Index (VIX) was down 2.1% to 17.99. A total of 19.63 billion shares were traded on Tuesday, higher than the last 20-session average of 18.08 billion. Decliners outnumbered advancers on the NYSE by a 1.79-to-1 ratio. On the Nasdaq, a 1.95-to-1 ratio favored declining issues.

Geopolitical Conflicts

The Middle East geopolitical conflicts between Iran and the United States remained unresolved. In order to end the war, Iran has demanded war reparations, full sovereignty over the Strait of Hormuz, the release of frozen Iranian assets and the lifting of economic sanctions.

President Donald Trump called this demand totally “unacceptable”. Trump said that the ongoing ceasefire between the two countries is “unbelievably weak” and “on massive life support”. As a result, the price of WTI crude oil advanced 4.2% to settle at $102.18 per barrel. The price of Brent crude also rose 3.4% to settle at $107.77 per barrel.

Market participants are keenly awaiting the upcoming tour of President Trump to China, where he will meet the Chinese Premier Xi Jinping. The two leaders are expected to discuss bilateral trade and tariffs  as well as artificial intelligence-related issues.

Hot Inflation Data

The Department of Labor reported that the headline consumer price index (CPI) rose 0.6% in April, in line with the Zacks Consensus Estimate. The metric for March was 0.9%. The reading for April marked the highest level since May 2023. Year over year, the headline CPI rose 3.8% in April, higher than the consensus mark of 3.7%.

The core CPI (excluding volatile food and energy items) rose 0.4% in April, in line with the Zacks Consensus Estimate. The metric for March was 0.2%. The reading for April marked the highest level since January 2025. Year over year, core CPI rose 2.8% in April, well above the Fed’s 2% target rate.

Consequently, investors remained concerned about a further cut in the benchmark interest rate this year. Instead, the CME FedWatch interest rate derivative tool currently showed a 30% probability that the central bank may raise the rate again this year.