US stocks attempted a comeback this Wednesday, with tech stocks driving gains despite ongoing concerns about tariffs. The Dow Jones Industrial Average (DJI) remained roughly flat after reversing early gains, while the S&P 500 (GSPC) rose about 0.8%. The Nasdaq Composite (IXIC) led the way, climbing nearly 1.5%.
The market’s movements were influenced by a key inflation report showing that the core Consumer Price Index (CPI) rose 3.1% in February, the lowest year-over-year increase since April 2021. Meanwhile, investors continued to digest the implications of fresh tariff battles as Canada retaliated against US trade measures.
Market Movers:
- Nvidia (NVDA): Shares of Nvidia surged more than 6% as tech stocks rebounded. The Information Technology (XLK) sector led sector gains, rising nearly 2%, with Nvidia benefiting from renewed investor confidence in AI-driven growth.
- Tesla (TSLA): Tesla stock rallied 8%, boosting the Consumer Discretionary (XLY) sector by about 0.8%. The electric vehicle giant saw strong buying interest following weeks of decline, with investors betting on a recovery in demand.
- Meta (META): Meta jumped over 4% as the broader tech sector gained momentum. The company has continued to benefit from strong digital advertising trends and its push into AI.
- Apple (AAPL): Apple shares rose 2.5% following reports of strong iPhone sales in key Asian markets, providing a boost to the broader tech sector.
Inflation and Tariff Tensions Drive Market Sentiment
The latest inflation data provided a mixed bag for investors. The slowdown in core CPI suggested cooling price pressures, which could influence future Federal Reserve policy decisions. Lower gasoline prices contributed to the overall inflation cooldown, with the gasoline index dropping 1% in February.
However, market volatility remained high as investors reacted to the latest tariff news. Canada announced retaliatory tariffs on $21 billion worth of US goods in response to President Trump's steel and aluminum duties. This move followed similar countermeasures from the European Union, escalating trade tensions.
Housing Inflation Hits Three-Year Low
Shelter costs, a key component of inflation, rose 4.2% in February, marking the slowest pace since December 2021. Rent inflation, which has been a persistent concern, showed signs of easing, potentially providing relief to consumers in the coming months.
Analysts have long predicted a slowdown in rent increases, and February’s inflation report appears to confirm this trend. If this trajectory continues, it could further support the case for the Federal Reserve's eventual pause in interest rate hikes.
Looking Ahead
Investors are closely watching for further developments on tariffs and Federal Reserve policy cues. While the tech-led rebound offered a positive signal, uncertainty over trade relations and inflation remains a key factor in market performance.
The focus will now turn to upcoming economic data releases, including job reports and consumer spending figures, which could provide further insight into the strength of the US economy. Additionally, any new policy moves from the Federal Reserve will be crucial in determining the market’s next direction.
