U.S. Stocks Close Flat In Cautious Trade As Investors Look For Inflation Data

U.S. stocks closed flat on Tuesday after turning in a lackluster performance as investors refrained from making significant moves, choosing to wait for the consumer inflation data, due later in the week.

Among the major averages, the Dow ended weak, settling at 34,599.82 with a loss of 30.42 points or 0.09 percent. The S&P 500, which hit a four-week high in early trades, closed at 4,227.26, up 0.74 points or 0.02%, while the Nasdaq closed higher by 43.19 points or 0.31 percent at 13,924.91.

Despite rising optimism about strong economic growth amid the acceleration in vaccine rollout and gradual reopening of businesses in several parts of the U.S., investors were reluctant to build up positions due to concerns about rising inflation and possibility of the Federal Reserve starting discussions on tapering its asset buying program.

Data released by the Commerce Department Tuesday morning showed U.S. trade deficit narrowed in the month of April, falling to $68.9 billion from a revised $75 billion in the previous month. Economists had expected the deficit to narrow to $69.0 billion from the $74.4 billion originally reported for the previous month.

Exports were up 1% at $205.0 billion, while the value of imports slumped by 1.4% to $273.9 billion in April.

A report from the National Federation of Independent Business said the NFIB Small Business Optimism Index in the United States stood at 99.6 in May 2021, slightly down from the previous month’s five-month high and well below pre-pandemic levels. It was the first decline in morale this year.

Meanwhile, job openings soared to a new record high in April. According to the data released, U.S. saw 9.3 million vacancies in April, well above the 8.3 million seen in March.

Data on U.S. consumer price inflation for the month of May is due out on Thursday. The data is likely to provide some cues on policy tapering from the Federal Reserve. The next meeting of the Federal Open Market Committee is scheduled to take place on June 15 and 16.

American Express, Honeywell International, United Health, Chevron, IBM, Apple and Amgen posted notable gains.

3M, Procter & Gamble, Goldman Sachs, Johnson & Johnson, DuPont, Coca-Cola, Walmart, Microsoft and Merck closed weak.

Tesla shares pared early gains and ended on a negative note.

In overseas trading, Asian shares ended mostly weak on Tuesday as investors awaited U.S. inflation data, due on Thursday, for indications about the Fed’s policy outlook.

European stocks closed higher after a cautious session as investors digested the latest batch of economic data and looked ahead to U.S. inflation data. Among the major markets, the U.K. ended modestly higher, France edged up marginally and Germany edged lower. The Swiss market closed on a positive note.