Stocks finished today's hectic session in the red in most main sectors, with only energy enjoying strong tailwinds throughout the day due to crude oil's surge. Utilities also eked out small gains, with industrials, financials, and healthcare outperforming the broader market as well. Real estate, materials, and consumer staples lagged the large-cap benchmarks, with tech, communication services, and the tech-heavy consumer discretionaries also showing weakness.

Traders said that despite today’s slight dip, the major indices still hit new recovery highs. As one trader explained, “The S&P 500 scored its seventh recovery high in a row this morning, before turning lower in the second half of the day, with the Dow, the Nasdaq, and the Russell 2000 also hitting multi-month highs, so bulls are still in the driver's seat on the Street.”

This morning's Consumer Price Index (CPI) report was just what the doctor ordered for bulls, as, despite the new trade tariffs, consumer inflation remained close to the Fed’s target rate of 2%, coming in at 2.4% on a year-over-year basis. Even though an uptick in inflation could still be in the cards in the coming months, global trends have been promising, and the odds of a rate cut by the Fed are rising. The Fed still expects inflation to top 3% before the end of the year, but given the past month’s price trends, the Central Bank might revise its projections lower next week.

The first details of the “trade framework” agreed at the talks between the U.S. and China were slightly disappointing according to most experts, as the “final” tariff on most Chinese exports will likely be set at 30%, with a levy of 55% on some products. On the bright side, Chinese ”rare earth” exports are part of the deal, albeit just for an initial period of six months, while China will only impose a 10% tariff on U.S. goods. Investors will likely turn their attention to the negotiations with India and the European Union (EU), and the nuclear talks with Iran could also take center stage following this week's setback.

Inflation will remain in focus tomorrow morning in terms of economic releases, as the Producer Price Index (PPI) will be out in pre-market trading following today’s consumer measure. The headline and Core PPIs are forecast to increase by 0.2% and 0.3%, respectively, but uncertainty regarding the report is unusually high due to the new trade tariffs. The weekly jobless claims report will be out before the opening bell as well, with the British GDP print and industrial production highlighting the overnight session.