*

GameStop ( GME ) falls after reporting decline in quarterly

revenue

*

US consumer prices rise moderately in May

*

Stocks move lower on Iraqi embassy evacuation

(Updates with end of trading session)

By Noel Randewich and Kanchana Chakravarty

June 11 (Reuters) - The S&P 500 ended lower on

Wednesday, with investors spooked by Middle East tensions, while

a tame inflation report calmed concerns around tariff-driven

price pressures and traders awaited more details on China-U.S.

trade talks.

Wall Street erased modest gains after sources said the

United States is preparing a partial evacuation of its Iraqi

embassy due to heightened security risks in the region. A senior

Iranian official said earlier that Tehran will strike U.S. bases

in the region if nuclear negotiations fail and conflict arises

with the United States.

Amazon ( AMZN ) and Nvidia ( NVDA ) declined following

recent gains, and they weighed on the S&P 500.

Data showed consumer prices increased only marginally in

May, while economists expect inflation to accelerate in the

coming months due to the Trump administration's import tariffs.

Annually, headline inflation stood at 2.4%, lower than the

2.5% rise estimated by economists polled by Reuters.

"There's still concern about Trump's tariffs being

inflationary but this report was better than expected and it

fuels hope that the Federal Reserve will be able to step in with

rate cuts later on this year," said Robert Pavlik, senior

portfolio manager at Dakota Wealth.

Traders project a 70% chance that the Federal Reserve will

cut interest rates by its September policy meeting, according to

the CME Group's FedWatch tool.

A day after officials from Washington and Beijing agreed on

a framework to put their tariff truce back on track, President

Donald Trump said the U.S. deal with China was done, with

Beijing to supply magnets and rare earth minerals.

According to preliminary data, the S&P 500 lost 15.09

points, or 0.25%, to end at 6,023.72 points, while the Nasdaq

Composite lost 93.53 points, or 0.47%, to 19,621.46. The

Dow Jones Industrial Average rose 5.35 points, or 0.01%,

to 42,872.22.

With investors betting the United States will reach trade

agreements that reduce Trump's steep trade barriers, the S&P 500

is now trading just below its February record high.

"The worst-case scenario is probably behind us. There's a

little bit of face-saving for both sides," said John Praveen,

managing director at Paleo Leon in Princeton, New Jersey. "They

got an agreement. The question is whether it will be

implemented."

According to a White House official, the agreement with

China allows the U.S. to charge a 55% tariff on imported Chinese

goods, including a 10% baseline "reciprocal" tariff, a 20%

tariff for fentanyl trafficking and a 25% tariff reflecting

pre-existing tariffs. China will charge a 10% tariff on U.S.

imports, the official said.

The U.S. stock market has rallied in recent weeks,

recovering from a slump in April sparked by Trump's "Liberation

Day" tariffs.

Software development platform provider GitLab ( GTLB ) fell

after its quarterly results disappointed investors.

Shares of videogame retailer GameStop ( GME ) dropped after

it reported a decline in first-quarter revenue.