What sell-off? Stocks have now erased their losses for the year

• The S&P 500 and Nasdaq-100 rose on Tuesday to turn positive for the year.
• It's the first time the benchmark indexes have been up year to date since February.
• Markets have been encouraged by progress on a US-China trade deal and cooler inflation.

After weathering a historically volatile April, stocks have recovered all their losses and then some in the first few weeks of May, with the S&P 500 and the Nasdaq-100 up year to date in Tuesday's session.

The indexes climbed Tuesday after consumer price index data showed inflation was lighter than expected last month. The broad S&P 500 rose, while the tech-heavy Nasdaq-100 got a big lift from Nvidia stock, which jumped more than 6% on news of a deal to provide high-end chip tech to Saudi Arabia.

It's the first time the indexes have been positive year to date since February. The S&P 500 gained 1% to hit an intraday high of 5,906.47, pushing it to a gain of 0.5% year to date. The Nasdaq-100 rose 1.75%, for a gain of about 0.15% since January.

The moves added to Monday's rally, which saw US stocks surge following a deal between the US and China to lower tariffs for 90 days.

The US is set to drop its tariff rate on Chinese goods to 30%, while China plans to lower duties on US imports to 10%. The news has soothed economic fears surrounding President Donald Trump's trade policy and quickly led some Wall Street forecasters to adjust recession expectations lower for the year.

Still, some top commentators brushed off the latest inflation data, speculating that tariffs could raise consumer prices in the coming months.

"Inflation looks likely to pick up in the second half of 2025 as businesses pass on the cost of tariffs," Bill Adams, the chief economist at Comerica Bank, wrote after the CPI release.