Dow, S&P 500, Nasdaq wobble as cool inflation data boosts Fed rate cut hopes

President Trump’s Truth Social posts aren’t moving markets like they used to.

At 8:04 a.m. ET Wednesday morning, the President posted on his social media platform, “OUR DEAL WITH CHINA IS DONE, SUBJECT TO FINAL APPROVAL WITH PRESIDENT XI AND ME.”

A post like that would’ve moved markets a month ago as stocks were swinging on any and every Trump update. But on Wednesday, futures tied to the major indexes barely budged after Trump’s post.

Instead, stocks found their direction from economic data. At 8:30 a.m. ET a cooler-than-expected reading of consumer prices for May sent futures higher as investors amped up bets that the Federal Reserve could cut interest rates at least twice this year.

This marked the latest sign that markets have moved on from President Trump’s trade war dictating every market move. Instead, focus is shifting back to the Federal Reserve and the path of the US economy.

“For some period of time, tariffs were the only thing that mattered,” Truist Co-CIO Keith Lerner told Yahoo Finance on Wednesday. “And I think we’re finding out today a lot of other factors matter.”

And for now, economists argue the economic picture may be improving.

“Combined with the solid May jobs report, the CPI data reduce the chances of a nasty bout of stagflation,” Bank of America US economist Stephen Juneau wrote in a note to clients on Wednesday. “That means a lower risk of “bad” cuts (due to a collapse in the labor market) but increased probability of “good” cuts (solid labor market and slowing inflation).”