Most US Stocks Slump; But Not Nvidia   07/15 15:28

   Most U.S. stocks slumped on Tuesday after the latest update on inflation 
hurt Wall Street's hopes for lower interest rates.

   NEW YORK (AP) -- Most U.S. stocks slumped on Tuesday after the latest update 
on inflation hurt Wall Street's hopes for lower interest rates.

   The S&P 500 fell 0.4%, though it's still near its all-time high set last 
week, as 90% of the stocks within the index fell. The Dow Jones Industrial 
Average dropped 436 points, or 1%.

   Tech stocks were an outlier, though, and the Nasdaq composite rose 0.2% to 
set another record thanks to Nvidia, the market's most influential stock.

   Stocks felt pressure from a report showing inflation in the United States 
accelerated to 2.7% last month from 2.4% in May. Economists pointed to 
increases in prices for clothes, toys and other things that tend to get 
imported from other countries. Their prices could be rising because of the 
tariffs that President Donald Trump has proposed on countries worldwide in 
hopes of getting them to open their markets further to U.S. products.

   "Inflation has begun to show the first signs of tariff pass-through," 
according to Ellen Zentner, chief economic strategist for Morgan Stanley Wealth 
Management.

   To be sure, the inflation rate reported on Tuesday morning wasn't far from 
what economists expected. And an underlying measure of inflation that 
economists think is a better predictor of future trends accelerated by less 
than feared.

   Altogether, the data helped cause Treasury yields to yo-yo a few times in 
the bond market before they began rising.

   The yield on the 10-year Treasury climbed to 4.48% from 4.43% late Monday. 
The yield on the two-year Treasury, which more closely tracks expectations for 
what the Federal Reserve will do with short-term interest rates, rose to 3.95% 
from 3.90%.

   A further acceleration in inflation could tie the hands of the Fed, which 
has been keeping interest rates on hold this year after cutting them at the end 
of last year. That's because lower rates can give inflation more fuel, along 
with a boost for the economy. Wall Street loves lower rates because they goose 
prices higher for stocks and other investments, and Trump himself has been 
clamoring for the Fed to cut more quickly.

   Fed Chair Jerome Powell, though, has been adamant that he wants to wait for 
more data about how tariffs affect the economy and inflation. Following 
Tuesday's inflation report, traders are still overwhelmingly betting that the 
Fed will cut its main interest rate by the end of the year. But they pulled 
back their bets on the number of potential cuts, according to data from CME 
Group.

   No one knows for sure if Trump will follow through on the stiff tariffs he's 
proposed, or if he'll flinch and back down if the economy and financial markets 
show too much pain. The hope is that he'll reach trade deals with other 
countries beforehand that will lower the sky-high tariff rates that Trump has 
proposed.

   Trump on Tuesday said he struck a deal with Indonesia, where it committed to 
buying energy, agricultural products and planes from the United States. Trump 
also said imports from Indonesia, which is the world's fourth-largest country 
by population, would face a tariff of 19% instead of the 32% that he had 
threatened earlier.

   On Wall Street, tech stocks were the outliers and rose after Nvidia said the 
U.S. government assured it that licenses will be granted for its H20 chip again 
and that deliveries will hopefully begin soon. Nvidia's 4% gain was by far the 
strongest force pushing upward on the S&P 500.

   Earlier this year, Nvidia said that U.S. restrictions on the chips used in 
artificial-intelligence development chiseled billions of dollars off its 
results for the first quarter of the year.

   Stocks of big U.S. banks, meanwhile, were mixed following their latest 
profit reports.

   JPMorgan Chase slipped 0.7% despite reporting a stronger profit than 
analysts expected, as CEO Jamie Dimon warned of risks to the economy because of 
tariffs and other concerns.

   Citigroup rose 3.7% following its better-than-expected profit report. But 
Wells Fargo fell 5.5% following its own, as it trimmed its forecast for an 
important way that it makes money.

   All told, the S&P 500 fell 24.80 points to 6,243.76. The Dow Jones 
Industrial Average dropped 436.36 to 44,023.29, and the Nasdaq composite rose 
37.47 to 20,677.80.

   In stock markets abroad, indexes slipped in Europe after a mixed session in 
Asia. Indexes rose 1.6% in Hong Kong but fell 0.4% in Shanghai after a report 
said China's economic growth slowed only slightly last quarter despite pressure 
from Trump's tariffs.