Promising Inflation News Did Not Stop Stock Market Downturn

Stocks market indices remained flat or fell slightly on Wednesday after news of mildly increasing consumer prices.

Written by: Timothy St. John • Thursday, June 12, 2025 • 2 min read

• Last updated: Thursday, June 12, 2025

Stocks are dipping after the consumer price index increases.

Quick overview

All three major stock market indices experienced minor losses on Wednesday despite better-than-expected inflation data.
The Dow Jones remained flat, while the S&P 500 and Nasdaq Composite saw slight declines of 0.27% and 0.05%, respectively.
Trade negotiations between China and the U.S. appear to be progressing, but significant tariffs remain in place.
The market's minor downturn may be a reaction to recent gains and could reverse if upcoming economic reports are positive.

All three major stock market indices dipped or stayed flat on Wednesday even though the inflation data came back better than expected and trade negotiations are promising.

Stocks are somewhat low after new inflation news releases.

The Dow Jones remained flat as trading closed off on Wednesday, and the S&P 500 marked its first loss for the day (down 0.27%) after three consecutive wins. The Nasdaq Composite did not fare any better, with a drop of 0.05%. These were minor losses but unexpected ones since the day’s economic data pointed to better than expected inflation numbers.

China and the United States seemed to have settled their trade difference for the moment, but the U.S. is still imposing stiff tariffs of 55% on most Chinese goods, which places the tariff numbers very close to where they were during Trump’s first term as President. The most severe tariffs between the two countries are still on pause, and that pause may continue past the 90-day period already promised, especially if the two countries can continue to negotiate.

Wednesday Dip Not as Bad as Previous Decreases

While it is unexpected for the market to move downward at this time after these two bits of promising news, the downturn is very minor. In the case of the S&P 500, we could be seeing what is primarily a reaction to several days of increases and an approach to the all-time high for that index.

As the S&P 500 retreats, the other two indices are almost completely flat. This could indicate that they will increase later today as the economic news is digested as well as after several new economic reports are released. Those will be the initial jobless claims as well as the PPI reports. If those reports show positive movement, then we expect the stock market to rally as a result.

Minor decreases on the stock market like this are expected, especially when the consumer price index increases. That index went up in May by 0.1%, which is less than the 0.2% that was expected. That is both good and bad news for the stock market, as it shows a stronger than expected economy but also shows that inflation is likely to stick for a while longer.

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ABOUT THE AUTHOR See More

Timothy St. John

Financial Writer - European & US Desks

Timothy St John is a seasoned financial analyst and writer, catering to the dynamic landscapes of the US and European markets. Boasting over a decade of extensive freelance writing experience, he has made significant contributions to reputable platforms such as Yahoo!Finance, business.com: Expert Business Advice, Tips, and Resources - Business.com, and numerous others. Timothy's expertise lies in in-depth research and comprehensive coverage of stock and cryptocurrency movements, coupled with a keen understanding of the economic factors influencing currency dynamics. Timothy majored in English at East Tennessee State University, and you can find him on LinkedIn.