On Wednesday the U.S. stock market’s upward climb took a brief break. This pause came as investors took some time to think over a report on inflation that wasn’t as high as many anticipated. At the same time they were considering a fresh approach between the U.S. and China to get trade cooperation back on track.

Earlier today the release of the May Consumer Price Index (CPI) revealed that inflation’s climb was more gentle than what experts had predicted – a piece of good news for both the financial hubs and the everyday folks. As worries about the effects of President Donald Trump’s tariff strategies on the wider economy continue to hover the latest CPI figures brought a sigh of relief by easing the anxiety over increasing costs for shoppers.

Even with encouraging news on inflation the stock market kept its guard up. The Dow Jones barely moved at the end of trading and the S&P 500 saw a small drop losing 0.3% of its value. On a day filled with shifts in the global economy and trade news the Nasdaq Composite (^IXIC) found itself at the forefront of losses dropping by roughly 0.5%.

At the start of the day the reaction from the markets to the announcement of a renewed agreement between the U.S. and China aimed at bolstering their trade ceasefire was somewhat tepid. Aimed at tackling key problems in the supply chain especially concerning rare earth elements and magnets this deal was meant to steer negotiations in Geneva towards a positive direction. Even though investors were still cautious because of ongoing geopolitical tensions and previous failures in discussions their excitement stayed low.

By the close of trading in the bond market the interest rate for the 10-year U.S. Treasury note fell reaching 4.42% a slight decrease from its previous rate of 4.47% and even lower than the 4.50% it stood at before the release of inflation information. This drop signals that investors believe inflation slowing down could lead the Federal Reserve to adopt a gentler approach possibly preventing any additional increases in interest rates.

At the same time the value of the U.S. dollar saw a decrease on the day. In a related observation the Dollar index experienced a drop by 0.4% reaching 98.68. This serves as further evidence that investors are starting to anticipate a less aggressive approach in monetary policy.

Heading into the week’s second half investors are keenly watching the next economic updates and the shifts in worldwide trade talks. Even though the pressure from rising prices seems to be lessening the journey forward is influenced by the world’s political landscape and what the Federal Reserve decides to do next. Markets might keep facing ups and downs as they try to make sense of conflicting messages coming from those in charge and from countries around the world.