U.S. stocks rose on Wednesday, supported by inflation data that was cooler than anticipated, which helped halt a steep selloff. However, the ongoing escalation of President Donald Trump’s disruptive, multi-front tariff war limited the gains. The S&P 500 and Nasdaq both ended the day higher, with the latter receiving a strong lift from tech and tech-related stocks.
Reports indicate that the Labor Department’s Consumer Price Index showed consumer prices cooling more than analysts had anticipated, offering reassurance that inflation is moving in the right direction. This has fueled optimism that the U.S. Federal Reserve may lower its key interest rate later this year.
“We’re seeing a bounce today on the lower-than-expected inflation read and some dip buying,” said Greg Bassuk, CEO of AXS Investments in New York. “But Wall Street and Main Street are still looking for direction. “Investors’ hopefulness about inflation cooling is being mitigated by the ongoing trade-war strife.”
Trump’s 25% duties imposed on imported steel and aluminum, have led to Canada and Europe responding with retaliatory tariffs on U.S. exports.
U.S. equities have faced pressure due to escalating tit-for-tat tariff disputes between the United States and its trading partners, unsettling investors and raising concerns that the resulting price shocks could push the U.S., along with Canada and Mexico, into a recession.
Goldman Sachs reduced its year-end target for the S&P 500, while J.P. Morgan has raised its expectations of a higher likelihood of a U.S. recession.
With the new advancements, the S&P 500 is 8.9% below its all-time closing that reached less than a month ago. On Monday, the bellwether index dipped below its 200-day moving average, considered a significant support level, for the first time since November 2023, according to Reports.