Markets were antsy ahead of May’s CPI data, expected to show price pressures upped the tempo a little bit to 2.5%. Also, what happened in London?

🌀 Wall Street Slumps

• Futures contracts tied to the S&P 500 were underwhelmed Tuesday morning, slipping and sliding about 20 points from the flat line, Dow futures were off by 120 points, and Nasdaq contracts were lower by more than 70 points.
• Not the upbeat reaction analysts had expected after the US and China struck a major trade agreement that took more than 20 hours of haggling. The pullback follows a two-day summit in London where officials hashed out the framework to implement the Geneva consensus reached in May — a deal aimed at rebooting the exchange of high-tech goods.
• Traders seem unconvinced, focusing instead on incoming inflation data (expected to tick up) and weighing whether the deal has enough teeth to reverse weeks of tech-sector unease and tariff confusion.

📢 Trade Talks End in Breakthrough (Sort of)

• After the London negotiations, Commerce Secretary Howard Lutnick said both sides were now aligned on reducing trade friction, including rolling back some US restrictions and resuming China’s rare-earth exports.
• “First we had to get sort of the negativity out,” Lutnick said, hinting that tensions had peaked in earlier talks but are now being channeled into “positive trade, growing trade.”
• Markets, however, have seen this movie before — and appear to be waiting for definitive action from Trump and Xi before celebrating by buying boatloads of Nvidia NVDA and other tariff-sensitive stocks.

☕ CPI on Deck — Chill or No Chill?

• The real market mover could land as soon as later today when May’s Consumer Price Index drops USCPI, with economists expecting a slight uptick to 2.5% from 2.3% in April.
• A hotter-than-expected CPI would put pressure back on the Fed, especially as tech and growth stocks remain hypersensitive to rate outlook shifts.
• Presently, futures dealmaking is pricing in caution — a “good news isn’t good enough” mood is setting the tone until inflation confirms the Fed’s next move.