May 13 (Reuters) - The S&P 500 and the Nasdaq inched higher on Tuesday as investors parsed fresh inflation data and gauged its monetary policy implications following a spirited market rally spurred by the U.S.-China trade reprieve.
U.S. consumer prices rebounded moderately in April, with headline inflation increasing 0.2% last month after dipping 0.1% in March. Economists polled by Reuters had forecast that the CPI would rise 0.3%.
The CPI climbed 2.3% in the 12 months through April, after advancing 2.4% in the 12-month period until March.
"In terms of inflation expectations and monetary policy, we're very much in the same place that we were before the report came out," said Jordan Rizzuto, chief investment officer at GammaRoad Capital Partners.
"We expect the Fed to continue to be in a wait-and-see mode until we see some further materialization of pricing pressures that may come from the new trade policies."
Traders leaned into bets that the Fed would hold off on lowering interest rates until September, while still anticipating two 25-basis-point cuts by the end of the year.
A number of U.S. Federal Reserve officials are slated to speak this week, including Chair Jerome Powell on Thursday.
Weighing on the Dow, UnitedHealth (UNH.N), fell 12.2% after the insurance bellwether suspended its annual forecast and its CEO stepped down.
Seven of the 11 S&P 500 sub-sectors were higher, with a 2.4% decline in the healthcare sector (.SPXHC), leading losses.
At 09:38 a.m., the Dow Jones Industrial Average (.DJI), fell 149.69 points, or 0.38%, to 42,260.41, the S&P 500 (.SPX), gained 12.03 points, or 0.21%, to 5,856.22, and the Nasdaq Composite (.IXIC), gained 106.92 points, or 0.57%, to 18,815.27.
Monday's relief rally saw Wall Street's major indexes soar, buoyed by Washington and Beijing's agreement to dial back stringent reciprocal tariffs, signaling a joint effort to stave off a global economic downturn.
The U.S. will pause the extra tariffs it imposed on Chinese imports to 30% from 145% for three months, while Chinese duties on U.S. imports will fall to 10% from 125% in the same period.
After the tariff truce, Goldman Sachs became the first major brokerage to lower its probability of a U.S. recession.
The three major indexes have managed to recover from losses since April 2 - or "Liberation Day" - when U.S. President Donald Trump announced sweeping reciprocal tariffs.
A 90-day pause announced on April 9 for countries other than China, along with solid earnings reports and a limited U.S.-UK trade agreement last week, helped the S&P 500 and the tech-heavy Nasdaq regain lost ground.
Most megacap and growth stocks swung higher, with Nvidia (NVDA.O), and Amazon.com (AMZN.O), up more than 2.3% each.
Crypto exchange operator Coinbase Global (COIN.O), opens new tab, which is slated to join the S&P 500 on May 19, was among the top movers, jumping 15%.
As earnings season draws to a close with more than 90% of S&P 500 companies having reported earnings, investors look forward to results from retail giant Walmart (WMT.N), opens new tab, expected later this week.
Advancing issues outnumbered decliners by a 2.13-to-1 ratio on the NYSE, and by a 1.45-to-1 ratio on the Nasdaq.
The S&P 500 posted nine new 52-week highs and one new low, while the Nasdaq Composite recorded 29 new highs and 22 new lows.
Reporting by Shashwat Chauhan and Pranav Kashyap in Bengaluru; Editing by Sherry Jacob-Phillips and Pooja Desai
