Equities Rose After Softer CPI as trade Risk Looms – US Market Wrap

The S&P 500 increased by 0.5%. The Nasdaq 100 gained 1.1%. The Dow Jones Industrial Average declined 0.2%. Tesla extended its two-day rally to 12%, as Nvidia led chipmakers higher.

Equities rose following a selloff that had the S&P 500 on the cusp of a technical correction. The rebound was led by tech megacaps, who were hard hit during the previous market meltdown.

Cooler-than-forecast February inflation pushed stocks higher after two days of heavy losses. A kneejerk rally in bonds quickly reversed and yields rose across the curve amid concerns over an escalating trade war.

While the unexpected slowing in consumer prices provided respite to traders, numerous Wall Street analysts viewed the data as the “calm before the storm” given the uncertainties surrounding the possible effects of tariffs on the economy.

In reality, the fear over the consequences of Trump’s proposals continued to influence sentiment, with the US market benchmark briefly erasing a 1.3% surge before rising again. The intraday swing of more than 1% marked the 14th consecutive session in which the market benchmark fluctuated by at least that much, the longest sequence since 2022.

The CPI climbed at the slowest rate in four months, but other indicators suggest that inflation is rising again. With Trump imposing tariffs on a number of commodities, including food and apparel, prices are projected to rise, putting consumers’ and the economy’s resiliency to the test.