Stocks rise on inflation data amid trade tensions

Stocks rise amid trade tensions and subdued inflation data; Canada and Europe retaliate against U.S. tariffs on steel and aluminum.

In Short

The stock market fluctuated due to trade tensions and inflation data, with the S&P 500 and Nasdaq seeing gains despite ongoing concerns about tariffs and economic growth. February’s inflation report showed a 2.8% rise, prompting investor fears of potential recession, yet stocks mostly rose afterward.

The stock market experienced fluctuations as investors reacted to recent trade tensions and inflation data.

On Wednesday, the S&P 500 and Nasdaq saw gains following a solid inflation report amidst ongoing trade disputes with Canada.

Recent days have seen both indexes pressured by global trade concerns and economic growth worries in the U.S.

February’s inflation report indicated a slight cooling, with a 2.8% rise over the past year, falling short of expectations. The report, the first under the new administration, does not reflect the effects of recent tariffs.

Increased prices

Concerns about inflation have been heightened, as President Trump’s tariffs may increase price pressures and impact economic growth. Rising inflation could complicate efforts by the Federal Reserve to reduce interest rates further.

The Trump administration’s 25% tariffs on steel and aluminium imports prompted Canada to retaliate with a levy on $29.8 billion of U.S. goods, while the EU announced tariffs on various U.S. products.

Investors fear that prolonged tariff uncertainty could negatively affect growth, risking a potential recession.

Despite this, stocks mostly rose post-report, with the Dow experiencing a slight decrease. The Nasdaq Composite increased by 1.2% and the S&P 500 rose by 0.5%.

European markets generally gained, and the U.S. dollar showed slight improvement. The Bank of Canada responded to economic concerns by lowering its main interest rate by a quarter point.