U.S. stocks are drifting near their record Wednesday after a report suggested President Donald Trump’s tariffs are not pushing inflation much higher, at least not yet.
The S&P 500 was up 0.2% in midday trading and is just 1.5% below its all-time high set in February. The Dow Jones Industrial Average was up 144 points, or 0.3%, as of 11:30 a.m. Eastern time, and the Nasdaq composite was 0.2% higher.
The action was a bit stronger in the bond market, where Treasury yields eased after a report showed inflation ticked up by less last month than economists expected. U.S. consumers had to pay prices that were 2.4% higher overall in May than a year earlier. That was up from April’s 2.3% inflation rate, but it wasn’t as bad as the 2.5% that Wall Street was expecting.
A fear has been that Trump’s wide-ranging tariffs could ignite another acceleration in inflation, just when it had seemed to get nearly all the way back to the Federal Reserve’s 2% target from more than 9% at its peak three summers ago.
It hasn’t happened, though economists warn it may take months more to feel the full effect of Trump’s tariffs. For the time being, many businesses may be pulling products they already had in their inventories rather than passing along higher costs from fresh imports.
“Another month goes by with little evidence of tariffs, but the longer-term inflation challenge they pose remain,” according to Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management.
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Author: Dillon B
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