Stocks closed lower on Wednesday as traders weighed a preliminary U.S.-China trade agreement and new inflation data. The market's recent run higher took a breather as major indexes ended the session near previous closing levels.

The S&P 500 lost 0.27% to end the day at 6,022.24, snapping a three-day win streak. The Nasdaq Composite fell 0.5% to 19,615.88. The Dow Jones Industrial Average shed a mere 1.1 points, closing at 42,865.77.

The consumer price index rose 0.1% in May from April, less than the 0.2% estimate from economists polled by Dow Jones. Core CPI, which strips out volatile food and energy prices, also increased 0.1%, less than expected.

"Inflation in May was lower than anticipated, suggesting the tariffs aren't having a large immediate impact because companies have been using existing inventories or slowly adjusting prices due to uncertain demand," said Alexandra Wilson-Elizondo, global co-CIO of multi-asset solutions at Goldman Sachs Asset Management.

"As we wait for the 90-day tariff pause to pass, the market will be caught between inflation and job prints. If inflation stays under control or the job market weakens, the Federal Reserve will likely consider cutting interest rates down the road," Wilson-Elizondo said.

Discussions between U.S. and Chinese officials have been a key focus this week for investors who remain on edge regarding trade policy.

Officials reached a consensus after two days of talks in London, but said that they will seek approval on the framework from the U.S. and Chinese presidents before implementing it. As part of the framework, China would approve the exports of rare earth minerals while the U.S. would roll back restrictions on the sale of advanced technology to China.

Even as the framework is being finalized, Commerce Secretary Howard Lutnick said Wednesday that U.S. tariffs on Chinese imports will not change from their current levels.

President Donald Trump said earlier in a Truth Social post that the deal with China is "done, subject to final approval with President Xi and me." As part of the deal framework, he said that magnets and "any necessary rare earths" will be supplied up front by China and the U.S. will allow Chinese students to attend U.S. colleges and universities, adding that "WE ARE GETTING A TOTAL OF 55% TARIFFS, CHINA IS GETTING 10%."

U.S. crude oil futures rose more than 4% on Wednesday afternoon on news of escalating tensions in the Middle East, particularly after sources told Reuters that the U.S. is preparing a partial evacuation of its embassy in Iraq due to heightened security risks in the region.

— CNBC's Evelyn Cheng contributed reporting.

Stocks end Wednesday lower across the board

The Dow Jones Industrial Average closed lower by 1.1 points to end at 42,865.77. The S&P 500 was down 0.27% to close at 6,022.24, while the tech-heavy Nasdaq Composite lost 0.50% and settled at 19,615.88.

— Pia Singh

U.S. crude oil jumps more than 4% on escalating Middle East tensions

U.S. crude oil futures rose more than 4% Wednesday on escalating tensions in the Middle East.

Brent crude futures rose $2.90, or 4.34%, to close at $69.77 barrel. U.S. West Texas Intermediate crude gained $3.17, or 4.88%, to settle at $68.15.

The U.S. is preparing a partial evacuation of its embassy in Iraq due to heightened security risks in the region, sources told Reuters. The U.S. military has authorized the "voluntary departure" of troops' dependents from the Middle East due to rising tensions with Iran, sources told the Associated Press.

— Spencer Kimball

Jefferies upgrades J.M. Smucker

Jefferies has turned positive on J.M. Smucker Wednesday, a day after the food company reported a fiscal fourth-quarter revenue miss and issued disappointing full-year earnings guidance. The stock tumbled 15.6% as a result Tuesday.

That pullback was overdone, analyst Scott Marks wrote in a note to clients. He upgraded shares to buy from hold and lowered his price target to $115 per share from $118 a share, suggesting nearly 22% upside from Tuesday's close.

He thinks J.M. Smucker's full-year guidance is a bit conservative, particularly the 80 cent earnings-per-share headwind expected for its coffee business. Lowered expectations for Hostess Brands, which it acquired in 2023, also doesn't mean the company is structurally impaired, he added.

"While we understand investor concern, we think F'26 may have been de-risked and believe its portfolio remains growth advantaged vs. peers, which current valuation ~40% discount to Food (vs. 25% historical) fails to reflect," Marks wrote.

Shares were less than 1% higher in premarket trading.

— Michelle Fox

Baird downgrades UnitedHealth to neutral

Baird downgraded shares of UnitedHealth to a neutral rating as the Wall Street firm's outlook on OptumHealth, a healthcare services subsidiary, turned more pessimistic.

"Our due diligence findings cast enough doubt on OptumHealth to give us pause on the long-term story. The path forward in mitigating v28 appears much more difficult than we previously expected," Baird said in a note to clients.

Baird also lowered its 12-month price target to $312 from $356. Shares of UnitedHealth Group are down almost 40% this year to roughly $309 apiece following a string of setbacks for the company.

The company has been grappling with a historic cyberattack, higher-than-expected medical costs and a torrent of public blowback after the murder of UnitedHealthcare CEO Brian Thompson.

— Yun Li

10-year Treasury auction shows healthy demand

The widely followed $39 billion 10-year Treasury auction provided some relief to investors who have been worried about global demand for the government asset.

The yield of 4.221% came in 7 basis points below the level when issued. Meanwhile, the level of direct and indirect bidding took control 91% of the auction, a similar pace last month but the most since February 2023, according to Peter Boockvar, chief investment officer of Bleakley Financial Group.

However, the bid to cover of 2.52 came in below the previous 12 month average of 2.57, marking the second weakest since October 2024.

"The 10 yr note auction was somewhat of a mixed bag but more good than not," Boockvar said.

Nonetheless, BMO's called the auction a "strong" one as demand Treasurys remains solid in the uncertain macro environment.

— Yun Li

Lockheed-Martin slumps as much as 7% on report Pentagon slashed F-35 request in half

Lockheed-Martin slumped as much as 7% Wednesday after the Pentagon cut its request for new F-35 fighter jets in half, to 24 planes from 48, according to Reuters, citing news first reported by Bloomberg.

Bethesda, Maryland-based Lockheed has trailed the wider market since late 2025, falling more than 10% over the past six months against the S&P 500 decline of less than 1%, according to FactSet data. First quarter earnings beat Wall Street estimates, but management warned that its 2025 business outlook "does not include the evolving impacts of tariffs or related recoveries, the recent Next Generation Air Dominance announcement or Executive Orders issued by the Administration."

— Scott Schnipper

Okla, Chewy among stocks making midday moves

Check out the companies making the biggest moves midday:

• Oklo — The advanced reactor company surged more than 25% after receiving a notice that it will likely win an award to power an Air Force base. Oklo would deploy one of its Aurora powerhouse plants at Eielson Air Force Base in Alaska. The award is not finalized and Oklo's reactor design has not been approved by the Nuclear Regulatory Commission yet.
• GameStop — Shares slipped nearly 5% after GameStop posted first-quarter revenue of $732.4 million, down from the $881.8 million figure seen in the same period a year prior.
• Chewy — The pet-focused e-commerce retailer tumbled 10% after posting 15 cents in earnings per share for the first quarter, missing the consensus forecast of 20 cents from analysts polled by LSEG. On the other hand, Chewy saw $3.12 billion in revenue, exceeding Wall Street's prediction of $3.08 billion.

For the full list, read here.

— Pia Singh

Oklo surges after taking step closer to power Air Force base

Oklo shares surged more than 25% after the nuclear technology company took a step toward powering an Air Force base with its proposed advanced reactor design.

Oklo received a notice that it will likely win an award to deploy one of its Aurora powerhouse plants at the Eielson Air Force Base in Alaska. It would design, construct, own and operate the plant under the terms of the anticipated agreement.

The award is not finalized. Oklo's reactor design has also not been approved by the Nuclear Regulatory Commission yet.

— Spencer Kimball

Lutnick says U.S. tariffs on China won't change again

Commerce Secretary Howard Lutnick said on "Money Movers" that the U.S. tariffs on China won't change from here.

Specifically, Lutnick was asked if it was fair to say the China tariffs won't change after this week's talks in London. He responded with "you can definitely say that."

A trade deal between the U.S. and China has still not been finalized.

— Jesse Pound

Quantum stocks pop after Nvidia CEO says industry is 'reaching an inflection point'

Shares of several quantum computing stocks popped on Wednesday on the back of bullish comments made by Nvidia CEO Jensen Huang.

"Quantum computing is reaching an inflection point," Jensen said during his keynote speech at Nvidia's GTC Paris developer conference Wednesday.

Rigetti Computing and Quantum Computing shares jumped nearly 20% and 35%, respectively, while IonQ added about 8%. Shares of D-Wave Quantum rose 1.8%.

— Pia Singh

Stocks open Wednesday little changed

Shortly after 9:30 a.m. ET on Wednesday, the S&P 500 was less than 0.1% higher, while the Dow Jones Industrial Average hovered near the flatline. The tech-heavy Nasdaq Composite gained 0.1%, meanwhile.

— Pia Singh

Trump says China will supply rare earths in ‘done’ deal with U.S.

U.S. President Donald Trump said in a Truth Social post on Wednesday said that "our deal with China is done" and that China will supply rare earths upfront to the U.S. as part of a trade agreement.

Trump said that magnets and "any necessary rare earths" will be supplied up front by China and that the U.S. will in turn make certain concessions such as allowing Chinese students to attend U.S. colleges and universities. The relationship between the world's two largest economies is "excellent," Trump said, adding "WE ARE GETTING A TOTAL OF 55% TARIFFS, CHINA IS GETTING 10%."

The agreement outlined between U.S. and Chinese officials in London is still subject to final approval with himself and China President Xi Jinping, Trump said in the post. More on this here.

— Sam Meredith, April Roach

Stock futures jump after May inflation report, Treasury yields dip

Futures tied to the three major U.S. stock indexes immediately jumped—reversing their earlier losses—after May's consumer price index data eased fears that the Trump administration's tariffs would have hiked inflation.

Bond yields turned lower, meanwhile. The 10-year Treasury yield was last around 2 basis points lower at 4.45%.

— Pia Singh

May CPI rises less than expected

Consumer prices rose slightly less than expected last month, giving investors some hope that inflation could be easing.

The consumer price index rose 0.1% in May from the prior month. Economists polled by Dow Jones expected CPI to rise 0.2%. Year over year, CPI increased by 2.4%, in line with expectations.

Core CPI, which strips out food and energy prices, also increased 0.1%, less than expected.

— Fred Imbert

See the stocks moving in premarket trading

These are some of the stocks making notable moves before the bell on Wednesday:

• GameStop — Shares of the video game retailer and meme stock slid 4%. GameStop posted first-quarter revenue of $732.4 million, down from the $881.8 million figure seen in the same period a year ago.
• Tesla — The electric vehicle maker's stock rose 1.7%, making it poised to record its fourth straight positive day. That comes after shares cratered last week following CEO Elon Musk's online feud with President Donald Trump. Musk said on Wednesday that he regrets some of his social media posts regarding Trump.
• Quantum computing — Quantum computing stocks advanced after Nvidia CEO Jensen Huang said during a developer conference that the space was reaching an inflection point. Shares of Quantum Computing climbed 7%, while Rigetti Computing and IonQ popped more than 4% and 3%, respectively. D-Wave Quantum added nearly 2%.

Click here for the full list.

— Alex Harring

Bank of America sees 18% upside from here for GE Vernova

GE Vernova should rise on the back of U.S. electrical load growth, according to Bank of America.

Bank of America analyst Andrew Obin lifted his price target for GE Vernova to $550 per share from $520, corresponding to an upside of 18% from the stock's Tuesday close of $465.31. Obin kept his buy rating on the stock.

Shares of GE Vernova have rallied 41% this year.

"We increase our 2027/28 Power revenue estimates by 2% and 5%, respectively," the analyst wrote. "Our target multiple is a premium to the 15x peer average on 2025E to reflect above-peer earnings growth and margin expansion."

As a catalyst, Obin cited increased U.S. electrical demand, which should grow at a compound annual growth rate of 2.5% from 2024 to 2035, resulting in raised estimates for GE Vernova's Power segment. With U.S. demand taking up a lot of GE Vernova's capacity additions, the company may need to further expand beginning in the second half of next year.

Meanwhile, U.S. load growth has also led to GE Vernova adding capacity to its electrification segment.

"We see building and vehicle electrification driving faster electrical load growth. This should drive increased demand for grid and power generation equipment as well as gas power services," Obin wrote. "Our Buy rating reflects these demand tailwinds and margin expansion trajectory."

— Lisa Kailai Han

Goldman Sachs raises Datadog price target to $138 per share

In a Tuesday note, Goldman Sachs raised its price target on cloud computing stock Datadog to $138 per share from $127. The bank simultaneously reiterated its buy rating on the name.

Shares of Datadog have shed 16% this year, but Goldman Sach's revised forecast implies the stock could add 15% from here.

Analyst Kash Rangan raised his price target after attending Datadog's 2025 DASH conference in New York City.

"We continue to view Datadog as a compounding growth asset," he wrote. "We walked away incrementally more constructive on Datadog's competitive positioning as a strategic infrastructure software provider with an end-to-end observability platform, while long-term growth prospects are bolstered by new product momentum and multiple secular tailwinds — scaling AI workloads, platform consolidation and digital transformation."

In particular, the analyst was encouraged by Datadog's "robust suite of AI innovations, "strategic product enhancements" and "further expansion into adjacent product vectors."

— Lisa Kailai Han

Quantum computing stocks rise after Nvidia CEO comments

Quantum computing stocks rose in the premarket after Nvidia CEO Jensen Huang said the space was in an inflection point.

Shares of Quantum Computing popped 8%, while Rigetti Computing climbed 4%. Huang was speaking at the VivaTech conference in Paris.

— Fred Imbert

U.S. and China officials reach a trade consensus

Representatives of the U.S. and China arrived at a consensus on trade after a second day of talks in London, according to an NBC transcript.

U.S. Commerce Secretary Howard Lutnick said that he and U.S. Trade Representative Jamieson Greer would return to Washington to "make sure President Trump approves" of the framework.

U.S. stock futures were little changed following the development. S&P 500 futures, Nasdaq 100 futures and Dow futures were all down roughly 0.1% each.

Read more from CNBC's Evelyn Cheng on the latest surrounding the trade talks here.

—Darla Mercado

Stocks making the biggest moves after hours

Check out some of the companies making headlines in extended trading.

• Dave & Buster's — Stock in the arcade and restaurant company gained more than 9% after Dave & Buster's reaffirmed its full-year guidance. Executives also pointing to encouraging data so far in June

• GitLab — The software stock pulled back 13% after the lower end of GitLab's second-quarter outlook missed analyst estimates for both earnings and revenue. GitLab's first-quarter results surpassed analyst expectations on the top and bottom line.

• GameStop — Shares pulled back roughly 5% after first-quarter revenue missed analyst estimates. GameStop notched revenue of $732.4 million, while analysts polled by FactSet forecast $750 million.

— Brian Evans

Stock futures are little changed

Stock futures were little changed on Tuesday, with investors looking for more progress on trade policy as talks between the U.S. and China continue.

Futures tied to the Dow Jones Industrial Average slipped 24 points, or 0.06%. S&P 500 futures lost 0.07%, while Nasdaq 100 futures pulled back 0.04%.

— Brian Evans