LIVE MARKETS-Trade optimism powers stocks for second strong day

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TRADE OPTIMISM POWERS STOCKS FOR SECOND STRONG DAY

The Nasdaq Composite and S&P 500 index posted their second strong day of gains on Tuesday after a weekend trade deal between the United States and China continued to boost risk sentiment and led some analysts to upgrade S&P 500 targets.

Softer than expected inflation for April added to investor optimism, with declining food costs partially offsetting rising rents, leading to the smallest annual increase in four years.

Investors are pricing out the worst case scenarios from tariffs as trade deals are reached, though with some trade levies still expected to endure market participants remain cautious that inflation could still see a renewed bout higher.

Trade levies are also seen not hurting growth as much as previously expected, which has pushed back expectations for the next Federal Reserve rate cut to occur in September.

Efforts by Congress to enact tax cuts and complete the U.S. budget are now in focus, though Republicans face internal disagreements over the policies.

The Nasdaq .IXIC was the best performing major index, gaining 1.61%, while the S&P 500 .SPX rose 0.72%.

The Dow Jones Industrial Average .DJI, which lost 0.64%, was weighed down by a near-18% collapse in UnitedHealth's UNH.N shares after the insurance company suspended its annual forecast and said its Chief Executive Andrew Witty resigned.

Here is Tuesday’s closing market snapshot:

(Karen Brettell)

TUESDAY'S EARLIER LIVE MARKETS POSTS:

INTERNATIONAL TRIPS TO US MORE RESILIENT THAN THOUGHT CLICK HERE

TARIFFS ON COMPANIES’ MINDS, ESG FADES ON EARNINGS CALLS CLICK HERE

NOMURA BETS ON CHINA FOLLOWING SURPRISE TARIFF REDUCTION WITH U.S. CLICK HERE

TARIFF FEVER, YET TO INFECT CPI, HAS SMALL BUSINESSES SWEATING CLICK HERE

U.S. STOCKS START OUT MIXED AFTER INFLATION REPORT CLICK HERE

GOLDMAN UPS ITS S&P 500 INDEX PRICE TARGETS CLICK HERE

S&P 500 INDEX MAKES A LEAP, NOW DOWN LESS THEN 5% FROM RECORD CLOSE CLICK HERE

TRADE WARS: FROM SPOTLIGHT TO SIDESHOW CLICK HERE

TRUMP BACKS OFF... NOW FOCUS ON FISCAL POLICY CLICK HERE

THE LAST 6 MONTHS: 90% OF MSCI INDICES HAVE BEATEN WALL ST CLICK HERE

STOXX MUTED AS TRADE WAR TRUCE CELEBRATION ENDS, EARNINGS RUMBLE ON CLICK HERE

EUROPE BEFORE THE BELL: MOOD TEMPERS AFTER U.S.-CHINE TRUCE CLICK HERE

WITH A HIATUS IN THE TRADE WAR, IT IS BACK TO THE GRIND CLICK HERE