TLDR
- Tech stocks showing recovery with Nasdaq gaining 1.2% while broader market remains volatile
- Recent CPI data shows inflation cooling to 3.1%, the lowest core rate since April 2021
- Trump’s tariff implementation has triggered counter-measures from Canada ($21B) and EU ($28B)
- Key tech companies like Nvidia and Tesla posted substantial gains of 6.4% and 7.6% respectively
- Market analysts watching upcoming PPI data and University of Michigan consumer sentiment surveys
Tech stocks are leading a cautious rebound. This comes as investors process inflation data and ongoing trade disputes.
The tech-heavy Nasdaq Composite rose 1.2% in recent trading. Meanwhile, the S&P 500 climbed a more modest 0.5%. The Dow Jones Industrial Average bucked the trend and finished down 0.2% after fluctuating throughout the session.
Major technology companies drove the upward movement. Nvidia shares surged over 6% to settle above the $115 mark. Tesla performed even better with a 7.6% jump in value. AMD joined the rally, gaining 4.1% and reclaiming territory above $100 per share.
These positive moves hint at possible market stabilization. However, many traders remain wary about predicting a full-scale recovery. The market needs to show more consistent positive signs before confidence fully returns.
CPI Data
Recent economic data has helped ease some investor concerns. The core Consumer Price Index rose 3.1% in February compared to last year. This represents a decline from January’s 3.3% reading.
The February figure marks an important milestone in the inflation story. It’s the lowest year-over-year increase in core CPI recorded since April 2021. This cooling inflation rate has provided some comfort to market participants.
Market focus now shifts to upcoming reports. The Producer Price Index data will be closely watched for additional inflation insights. Economists expect both headline and core PPI to show monthly increases of 0.3%.
The PPI figures carry extra weight among market observers. They often correlate strongly with the Federal Reserve’s preferred inflation measure, the Core PCE Price Index. Any surprise in these numbers could shift expectations about future Fed interest rate decisions.
Another key economic indicator arrives Friday. The University of Michigan will release its consumer confidence surveys. Last month’s report showed a sharp drop in consumer sentiment. This raised questions about how trade policies might be affecting economic outlook.
The inflation expectations portion of the survey will receive extra scrutiny. It jumped from 3.3% to 4.3% in the previous report. High inflation expectations can sometimes become self-fulfilling as consumers and businesses adjust their behavior.
One limitation of the recent inflation data is timing. The February numbers don’t fully reflect the potential price impacts of Trump’s new tariff policies. These trade measures could put upward pressure on prices in future reports.
Fed Rate Cuts?
The Federal Reserve is expected to maintain a careful approach. Officials will likely want to see a longer trend of improved inflation data before making policy changes. They’re also watching how trade tensions and immigration policies affect economic conditions.
Trade policy has emerged as a major market driver. President Trump’s tariffs on steel and aluminum imports took effect Wednesday. Trading partners have responded quickly with their own measures.
Canada has introduced tariffs on $21 billion of American goods. The European Union has prepared similar counter-tariffs totaling $28 billion, set to begin in April. These trade responses have added another layer of uncertainty to market calculations.
Markets have proven highly reactive to tariff developments. Stock indices have fallen on new tariff announcements and recovered when more conciliatory trade statements emerge. Trump’s decision to back away from additional 25% levies on Canadian exports helped fuel yesterday’s market recovery.
Technical analysts see important support levels for the Nasdaq 100. The index has found buying interest in the 19150-19400 range. This area aligns with the 61.8% Fibonacci retracement level from the rally that began last August. The Relative Strength Index has entered oversold territory, potentially setting up conditions for a bounce.
If buying momentum continues, resistance may appear at 19765, followed by the psychologically important 20,000 level. The 200-day moving average hovers around 20385. Should selling pressure return, support might be tested at 18,800 or possibly the 78.6% Fibonacci level at 18437.
