Wall Street Mixed as Trade Concerns Weigh on Midday Gains
U.S. stock indexes were mixed Wednesday as trade tensions overshadowed cooling inflation data. The Dow Jones Industrial Average was down 198 points, while the S&P 500 edged up 0.26%. The Nasdaq Composite led gains, rising 0.9%, driven by a rebound in major tech stocks.
Is Softer Inflation Enough to Ease Rate Concerns?
The consumer price index (CPI) increased 0.2% in February, below the 0.3% estimate, bringing annual inflation to 2.8%. Core CPI, excluding food and energy, rose 3.1% year-over-year, also below forecasts.
While the data suggests easing price pressures, analysts caution that newly imposed tariffs could add inflationary risks. Traders are still pricing in a 25-basis-point rate cut in June, while the Federal Reserve is expected to hold rates steady at its meeting next week.
Tech Stocks Recover—Will Gains Hold?
The Nasdaq outperformed as investors bought beaten-down tech stocks. Nvidia surged 6%, while AMD gained 4%. Tesla jumped 8%, extending recent gains after renewed investor interest.
Semiconductors were in focus after reports that TSMC proposed a joint venture with Intel, Nvidia, and AMD to manage Intel’s foundry operations. Intel shares rose 3%, and the broader chip index climbed 2.5%, supporting tech sector gains.
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See all Dow Jones forecastsHow Are Sectors Performing?
Sectors were mixed, reflecting cautious sentiment. Technology (+1.27%) and communication services (+0.89%) led gains, while consumer staples (-1.64%) and health care (-0.86%) struggled.
Trade-sensitive sectors saw notable moves. Steel and aluminum stocks rallied, with Cleveland Cliffs up 9.45 and Alcoa adding 2.5%, as tariffs provided a short-term boost. However, automakers struggled, with Ford and GM falling 1.5% and 1.3%, respectively. Airline stocks slid 4.3% on concerns about higher material costs.
Trade Tensions Keep Markets on Edge
Markets remained cautious as Trump’s 25% tariffs on steel and aluminum took effect, with speculation they could extend to copper. Canada imposed 25% retaliatory duties on over $20 billion in U.S. imports, while the European Union announced counter-tariffs on $28.3 billion worth of U.S. goods starting in April.
Midday Outlook: Uncertainty Capping Gains
Despite the Nasdaq’s strength, broader risks remain. The S&P 500 has been struggling to stay out of correction territory, and analysts warn that ongoing trade uncertainty could slow corporate investment.
Traders are closely watching Thursday’s producer price index (PPI) report for further inflation signals. A hotter-than-expected reading could reinforce concerns that the Fed may delay rate cuts, limiting further stock market upside.
More Information in our Economic Calendar.
