The Nasdaq Composite rose on Wednesday following a soft inflation report that eased concerns about the economy, with the tech-heavy benchmark jumping 1.22%. The S&P 500 also gained 0.49%, while the Dow Jones Industrial Average slipped slightly. Tech stocks, which had been down for the week, rebounded with Nvidia, AMD, Meta Platforms, and Tesla all showing gains.
The consumer price index showed a modest increase of 0.2% for the month, with an annual inflation rate of 2.8%, slightly lower than expected. Core CPI, excluding food and energy prices, rose 0.2% for the month and 3.1% over the past year, also below expectations. This data eased concerns about stagflation and allowed for more flexibility in Fed policy.
President Trump’s steel and aluminum tariffs came into effect this week, leading to retaliatory measures from Canada and the European Union, which raised fears of a trade war triggering a U.S. recession. The ongoing trade tensions have contributed to recent market sell-offs.
Despite this, experts believe that the market correction was expected given the strong performance of U.S. equity markets in recent years. While there may be further volatility ahead, some remain optimistic about the potential for positive outcomes from key fiscal policy changes in the future.
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