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US stocks’ bid for a rebound lost steam on Wednesday as signs of an escalation in the US-Canada trade war eclipsed a better-than-expected inflation reading.
The Dow Jones Industrial Average (^DJI) was roughly 0.3% lower after reversing course. Meanwhile, the S&P 500 (^GSPC) was down about 0.3%, while the Nasdaq Composite (^IXIC) gained nearly 0.3%. Both the S&P 500 and Nasdaq had been up more than 1% earlier in the session before news on tariffs sent stocks lower.
On Wednesday, the latest data from the Bureau of Labor Statistics showed that the “core” Consumer Price Index (CPI) — which strips out the more volatile costs of food and gas — rose 3.1% in February, down from 3.3% seen the month prior. This marked the lowest yearly increase in core CPI since April 2021.
SNP – Free Realtime Quote USD
(^GSPC)
As of 11:47:29 AM EDT. Market Open.
^GSPC ^DJI ^IXIC
But Trump’s fast-moving tariff policy is front of mind after uncertainty fueled another volatile session ending in losses on Tuesday.
Canada has imposed tariffs on $21 billion of US goods in response to President Trump’s across-the-board duties on steel and aluminum, which went into effect on Wednesday. The EU earlier made its own response, placing matching counter-tariffs on $28 billion in US goods from April.
A rebound in Big Tech stayed strong despite the selling action in the major indexes, with Nvidia (NVDA) and Tesla (TSLA) both up more than 4%.
Read more: The latest on Trump’s tariff plans
LIVE 14 updates
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One reason markets keep moving on every tariff headline
News of retaliatory tariffs from Canada erased a more than 1% gain for the S&P 500 (^GSPC) on Wednesday, continuing a recent trend of stocks hinging on any incremental news on tariffs.
JPMorgan Asset Management global market strategist Jack Manley told Yahoo Finance the market’s recent struggles center around an inability to properly price in how tariffs will impact the outlook for both the US economy and corporate profits.
“It’s not easy to price out how tariffs may influence the US economy, but it’s possible,” Manley said.
“What becomes a lot more difficult is pricing in how Canada might respond to tariffs from the US and how those could lead to additional tariffs. It snowballs very, very quickly and makes pricing in anything extremely difficult.”
Piper Sandler chief investment strategist Michael Kantrowitz wrote in a note on Tuesday, “[We’re] unlikely to see a material recovery in equities until we see the start of fiscal policy uncertainty abating,” noting that a recent surge in economic policy uncertainty measures has coincided with the market’s recent slide.
“Of course, that can happen in more than one way,” Kantrowitz added.
“We can either be more certain of tariff policies that will be implemented, or Trump can slow the pace or roll back some of his actions.”
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Stocks fall from intraday highs as Canada sets retaliatory tariffs for Thursday
Stocks slipped from their intraday highs on Wednesday morning as headlines flashed that Canada will impose retaliatory on the US starting Thursday.
Canada will impose 25% tariffs on more than $20 billion worth of US goods, per CNBC.
SNP – Free Realtime Quote USD
(^GSPC)
As of 11:47:29 AM EDT. Market Open.
^GSPC ^DJI ^IXIC
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Housing inflation hits lowest level since December 2021
The latest Consumer Price Index (CPI) showed that housing cost pressures eased in February to the slowest pace in over three years.
Shelter costs rose 4.2% from a year earlier in February, slower than the 4.4% increase seen in January, and the smallest 12-month increase since December 2021.
On a monthly basis, housing costs ticked up 0.3% in Februarydown from January’s 0.4% monthly increase.
“Shelter inflation remains in a disinflationary trajectory, which will be a welcome development for those hoping for further progress on inflation,” Jeff Schulze, head of economic and market strategy at ClearBridge Investments, told Yahoo Finance in an email.
Economists have long expected a slowdown in rent increases, a trend that has been reflected in other data. February’s inflation print could be the latest sign that the broader cooldown in rents might finally appear in CPI. The BLS collects rent data every six months, which has caused a lag in the reporting.
The government said the rent index rose 0.3% in February, matching January’s pace of 0.3%.
Meanwhile, prices for owners’ equivalent rent increased 0.3% for the month, unchanged from January’s 0.3% gain. Owners’ equivalent rent is the estimated rent a homeowner would pay if they rented their property.
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Stocks pop at the open after promising inflation data
The S&P 500 (^GSPC) rose more than 1.2%, while the Dow Jones Industrial Average (^DJI) added about 0.6% or nearly 300 points at the start of Wednesday’s trading.
The Nasdaq Composite (^IXIC) led the gains, rising almost 2%.
The rally at the open marked the first sign of reprieve after the S&P 500 closed on Tuesday down nearly 10% from its most recent all-time high.
Big Tech stocks were at the forefront, with Nvidia (NVDA) up more than 6% and Meta (META) up over 4% at the open.
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Gasoline prices decrease, helping lead inflation cooldown in February
Falling gasoline prices contributed to cooler-than-expected inflation in February.
The gasoline index declined 1% last month, compared to a rise of 1.8% in the prior month, according to data from the Bureau of Labor Statistics released on Wednesday.
On an annualized basis gasoline prices decreased 3.1%.
On Wednesday, the national price of gasoline hovered at $3.08 per gallon, about $0.07 lower than a month ago, according to AAA data.
Despite the decrease in gas prices, the energy index rose 0.2% over the month as electricity and natural gas prices rose.
While oil prices have declined year to date, natural gas has soared amid a colder-than-expected winter and increasing exports.
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Key inflation measure hits lowest level in nearly four years
Stock futures are ripping higher on Wednesday morning after the release of a better-than-expected inflation reading.
On Wednesday, the latest data from the Bureau of Labor Statistics showed that the “core” Consumer Price Index (CPI) — which strips out the more volatile costs of food and gas — rose 3.1% in February, down from 3.3% seen the month prior. This marked the lowest yearly increase in core CPI since April 2021.
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Inflation increases less than expected in February
New data from the Bureau of Labor Statistics out Wednesday showed that a key inflation metric rose by less than anticipated in February.
On a “core” basis, which strips out the more volatile costs of food and gas, the February Consumer Price Index (CPI) climbed 0.2% from January’s 0.4% monthly gain and below the 0.3% economists had expected. On an annual basis, prices rose 3.1%, below economists’ expectations of 3.2% and lower than the 3.3% increase last month.
Headline consumer prices also rose less than expected. The CPI increased 2.8% over the prior year in February, a decrease from January’s 3% annual gain in prices. The yearly increase was below the 2.9% economists had expected.
The index rose 0.2% over the previous month, well below the 0.5% surge seen in January.
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Europe stocks rebound strongly after EU reveals its counter-tariffs
European stocks were staging a comeback on Wednesday from four days of losses after the EU retaliated against US tariffs on steel.
Meanwhile, optimism rose that a US-Ukraine ceasefire plan could pause the war with Russia, as the US resumes military aid.
The pan-regional benchmark Stoxx 600 (^STOXX) index was roughly 1.2% higher at lunchtime local time.
Meanwhile, Germany’s DAX (^GDAXI) surged 1.9%, while the CAC (^FCHI) in Paris jumped 1.5%. In London, the benchmark (^FTSE) index put on 0.6% after the UK said it won’t respond to the US metals tariffs implemented on Wednesday.
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Wall Street’s hopes for a 2025 IPO bonanza are being put to the test
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February CPI report expected to show inflation moderated as ‘stagflation’ fears rise
Stock futures gained as investors awaited the first CPI inflation report under the Trump administration.
Futures on the S&P 500 (ES=F) climbed 0.8%, while Dow Jones Industrial Average futures (YM=F) rose 248 points, or 0.6%. Those on the tech-heavy Nasdaq 100 (NQ=F) led, advancing 1% higher, after a jittery session Tuesday.
CME – Delayed Quote USD
(ES=F)
As of 11:37:30 AM EDT. Market Open.
ES=F YM=F NQ=F
The Consumer Price Index, set for release at 8:30 a.m. ET, may be the latest event to put pressure on stocks as investors mount concerns of a US economic downturn. The report is expected to show price increases moderated in February.
Yahoo Finance’s Allie Canal writes:
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The stock market’s sharp drop might have already priced in a ‘shallow’ recession
A run of disappointing US economic data to start 2025 has prompted downgrades to forecasts for GDP growth — with Trump’s policy agenda seen as a key drag.
The S&P 500 (^GSPC) is on the verge of correction territory — 10% off its most recent record high — as those fears of an economic slowdown sparked a sell-off.
Yahoo Finance’s Josh Schafer reports:
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Intel stock jumps after report TSMC is pursuing a foundry JV with other chip leaders
Intel (INTC) shares jumped almost 8% in premarket after a Reuters report said TSMC has approached Nvidia (NVDA), Broadcom (AVGO), and AMD (AMD) about a joint venture for its chipmaking plants.
The stock has been on a ride recently as Wall Street wavered over the chances of potential deals with rivals that would break up Intel. Its shares have lost over half their value this year, which has seen the struggling US chipmaker searching for a new CEO.
But analysts have noted that a TSMC-Intel deal is likely to face scrutiny from regulators at home and abroad, and argue that a foundry move wouldn’t make sense given a difference in manufacturing processes.
Reuters reports, citing sources familiar with the matter:
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Good morning. Here’s what’s happening today.
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Trending tickers after-hours Tuesday
Groupon (GRPN)
Groupon shares rocketed up 23% after the e-commerce marketplace issued better-than-expected full-year revenue guidance. Groupon forecasts full-year revenue from $493 million to $500 million.
Finance of America Inc (FOA)
Retirement loans company Finance of America stock tanked 17% in after-hours trade.
Stitch Fix, Inc (SFIX)
Stock in online personal styling and e-commerce apparel retailer Stitch Fix jumped 19% in after-hours trade. After announcing earnings, Stitch Fix projects total fiscal-year sales between $1.225 billion and $1.240 billion as the company pivots to AI algorithm usage in its styling service.
