U.S. Stocks Move Mostly Higher After Early Volatility

After seeing considerable volatility early in the session, stocks moved mostly higher over the course of the trading day on Wednesday. With the upward move, the Nasdaq and the S&P 500 regained ground after ending Tuesday’s trading at their lowest closing levels in six months.

The tech-heavy Nasdaq led the way higher, jumping 212.35 points or 1.2 percent to 17,648.45. The S&P 500 also climbed 27.23 points or 0.5 percent to 5,599.30, although the narrower Dow bucked the uptrend and dipped 82.55 points or 0.2 percent to 41,350.93.

The strength on Wall Street came following the release of a closely watched Labor Department report showing consumer prices in the U.S. increased by slightly less than expected in the month of February.

The Labor Department said its consumer price index crept up by 0.2 percent in February after climbing by 0.5 percent in January. Economists had expected consumer prices to rise by 0.3 percent.

Excluding food and energy prices, the core consumer price index also rose by 0.2 percent in February following a 0.4 percent increase in January. Core prices were also expected to climb by 0.3 percent.

The report also said the annual rate of consumer price growth slowed to 2.8 percent in February from 3.0 percent in January. Economists had expected the pace of price growth to edge down to 2.9 percent.

The annual rate of core consumer price growth also slowed to 3.1 percent in February from 3.3 percent in January. Core price growth was expected to dip to 3.2 percent.

The tamer-than-expected inflation data led to some optimism about the Federal Reserve resuming interest rate cuts in the near future.

“With a lower-than-expected inflation number (both month-over-month and year-over-year), at least the Fed still has the flexibility to step in to support a weaker economy, and that would be good news for markets,” said Chris Zaccarelli, Chief Investment Officer for Northlight Asset Management.

Buying interest was somewhat subdued, however, as concerns about the impact of new trade policies continue to weigh on the markets.

With new U.S. steel and aluminum imports taking effect today, the European Union said it would impose counter tariffs on 26 billion euros ($28 billion) worth of U.S. goods beginning next month.

Canada has also announced it will impose 25 percent tariffs on more than $20 billion worth of U.S. goods in retaliation for the steel and aluminum duties

Sector News

Semiconductor stocks saw substantial strength amid a surge by shares of Nvidia (NVDA), with the Philadelphia Semiconductor Index jumping by 2.5 percent after ending the previous session at a nearly eleven-month closing low.

Significant strength was also visible among software stocks, as reflected by the 1.5 percent gain posted by the Dow Jones U.S. Software Index.

Banking and networking stocks also saw some strength on the day, while airline, telecom and pharmaceutical stocks showed notable moves to the downside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Wednesday. China’s Shanghai Composite Index dipped by 0.2 percent and Hong Kong’s Hang Seng Index slid by 0.8 percent, although Japan’s Nikkei 225 Index bucked the downtrend and inched up by 0.1 percent.

Meanwhile, the major European markets moved to the upside on the day. While the German DAX Index surged by 1.6 percent, the French CAC 40 Index and the U.K.’s FTSE 100 Index climbed by 0.6 percent and 0.5 percent, respectively.

In the bond market, treasuries moved to the downside over the course of the session after seeing early volatility. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose 3.0 basis points to 4.318 percent.

Looking Ahead

Reports on producer price inflation and weekly jobless claims are likely to attract attention on Thursday along with the latest developments on the tariff front.

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