Wall Street rallies on soft inflation data
US stocks ended higher on Wednesday after inflation data came in lower than expected, easing concerns about Federal Reserve policy and economic growth. The Nasdaq Composite gained 1.22% to close at 17,648.45, with investors snapping up technology shares. The S&P 500 rose 0.49% to 5,599.30, while the Dow Jones Industrial Average slipped 82.55 points, or 0.2%, to 41,350.93.
The latest consumer price index report showed a 0.2% monthly increase, bringing annual inflation to 2.8%, below economists’ expectations of 2.9%. Core inflation, which excludes food and energy, also rose by 0.2% for the month, with an annual rate of 3.1%. Analysts noted that these figures suggest the Fed has more flexibility in setting interest rates.
Tech stocks rebound
The technology sector led gains, reversing some of its recent losses. Nvidia surged 6.4%, while AMD rose more than 4%. Meta Platforms climbed 2%, and Tesla jumped 7.6%. Despite the strong session, the tech sector remains down more than 3% for the week.
The broader market has been under pressure due to investor concerns about slowing economic growth and rising trade tensions. Over the past month, the S&P 500 has lost more than 7%, while the Nasdaq is down 10.2%.
Trade tensions escalate
President Donald Trump’s new tariffs on steel and aluminium took effect on Wednesday, with Canada responding by imposing 25% retaliatory duties on $20bn worth of US goods. The European Union has also announced counter-tariffs on $28.3bn worth of US imports, set to begin in April. The uncertainty surrounding trade policy has weighed on markets, with investors worried about the impact on inflation and economic growth.
Australian market outlook
The Australian share market is set to open higher following Wall Street’s gains, as hopes for a US rate cut lifted investor sentiment. Futures are pointing to an 18 point rise. However, concerns remain over Trump’s escalating tariff measures, which continue to cloud the global economic outlook.
Nvidia’s rebound and Tesla’s rally helped steady US markets, providing some support for Australian technology stocks. Meanwhile, the Bank of Canada cut its key interest rate by 25 basis points to 2.75%, highlighting concerns about economic growth.
