Happy Wednesday! Markets cheered April’s cooler-than-expected inflation data, but some experts warn that we aren’t out of the woods just yet. Read on to see what could be coming next.

Also, Wall Street is buzzing after a top strategist slashed recession odds and increased his S&P 500 year-end target. Read the full story to find out what’s behind the shift.

Plus, if you’re looking for a sustainable agriculture investment tackling food insecurity in Africa with innovative technology, check out today’s sponsor.

MARKET RECAP

Yesterday: U.S. indexes closed mostly higher Tuesday, lifted by easing trade tensions and softer-than-expected April inflation data. Headline CPI rose 0.2% for the month and 2.3% year-over-year, while core inflation showed signs of cooling, helping anchor inflation expectations and reinforcing the outlook for potential Fed rate cuts later this year. Growth sectors like technology and consumer discretionary outperformed, while defensive sectors lagged, weighed down in part by UnitedHealth Group after its CEO announced plans to step down. Treasury yields moved modestly higher, with the 10-year yield climbing to 4.48%. Earnings season has remained strong, with 78% of S&P 500 companies topping estimates and Q1 earnings growth at 13%.

On Our Radar: Analysts will be watching closely as Fed Governor Michael Barr delivers remarks, while fresh data on industrial production, business inventories and homebuilder sentiment provide a read on underlying economic momentum. With regards to corporate earnings, all eyes will be on Walmart — the world’ biggest retailer — as well as Deere & Company. Both companies will report before the market opens on Thursday.

TOP STORY

Tariffs Paused, But Not Gone: Economist Says Inflation Risks Remain

This week’s CPI report delivered a welcome surprise to investors: inflation cooled more than expected in April, reigniting optimism about potential interest rate cuts from the Federal Reserve.

Markets responded favorably to the news and the data, however, beneath the surface still lies a growing undercurrent of caution. While the numbers are moving in the right direction — headline CPI at 2.3% and core CPI slipping in under projections — some experts warn that we’re not out of the woods just yet.

Notable economists such as Mohamed El-Erian and Bill Adams warn that although tariffs have been paused, their lingering effects could still fan the flames of inflation later this year.

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FIVE ZINGERS

Ctrl+Alt+Layoff: Microsoft is slashing 6,000 jobs as it restructures for an AI-powered future, cutting layers of management to boost speed and efficiency. Find out why Big Tech’s most valuable player is betting big on bots — and what it means for the future.

Power Surge: Shares of Oklo soared after the company posted Q1 results that showed signs of progress and strong cash reserves, setting the stage for its first nuclear plant in 2027-2028. With the company having a new CTO onboard, check out the full story here to see why this startup seems primed for growth.

Crypto Deal: Robinhood’s stock soared after announcing its acquisition of WonderFi, a Canadian crypto platform, in a $180 million deal. Will this move pay off for Robinhood’s global ambitions? Read on to find out.

Retail Blues: American Eagle’s shares took a nosedive after the company warned of weak Q1 results and withdrew its full-year forecast, citing poor execution and excess inventory. With a rocky start to 2025, will AEO rebound, or is this a sign of deeper trouble?

Market Bounce: Wall Street continued its momentum after April’s inflation data came in cooler than expected — calming fears of escalating prices. The Nasdaq 100 finished the day hitting a 10-week high, sparking investor optimism. Here are all the details.

ONE FOR THE ROAD

Ed Yardeni Slashes Recession Odds To 25% After US Stocks Rally, Lifts S&P 500 Year-End Target To 6,500

One of Wall Street’s most closely watched strategists just made another bold call that has the market buzzing.

Ed Yardeni, an independent strategist, is lowering his recession odds to just 25% after the U.S and China agreed to temporarily suspend tariffs for 90 days in what was a breakthrough between the world’s two largest economies. With this, Yardeni has renewed confidence in the economy’s trajectory, and he’s not stopping there. The veteran strategist is also raising his year-end S&P 500 target to 6,500 — a level that is even catching some of the most bullish investors by surprise.

What’s behind the shift? A global development that eased investor nerves — and a subtle but significant change in how Yardeni interprets consumer resilience, especially among equity-heavy Baby Boomers.

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