Major United States benchmark averages closed mixed on Wednesday (Thursday AEDT) as a softer-than-expected inflation report bolstered risk appetite, driving a rebound in technology companies.
The Dow Jones Industrial Average slipped 82.6 points, or 0.2%, to 41,350.9, while the S&P 500 gained 0.5% to end at 5,599.3, and the Nasdaq Composite advanced 1.2% to close at 17,648.5.
Despite the technology sector being down more than 3% for the week, it led Wednesday’s rally. Nvidia surged 6.4%, Meta Platforms rose 2.3%, and Tesla jumped 7.6%.
The gains followed the release of the latest Consumer Price Index (CPI) data, which indicated that inflation was slowing more than expected.
The CPI rose 0.2% in February, bringing the annual inflation rate to 2.8%, both figures coming in below market expectations of 0.3% and 2.9%, respectively.
Core CPI, which excludes volatile food and energy prices, also increased 0.2% for the month, bringing the annual rate to 3.1%.
ANZ analysts commented in a note to clients:
"Following the data, the Cleveland Fed’s core PCE inflation nowcasting estimates a February reading of 0.19%. Data along this line will assure the FOMC that disinflation progress is intact.
"However, the data does not present a case for the FOMC to cut interest rates imminently, as the economic outlook is uncertain. We expect the FOMC will keep the federal funds rate unchanged at its meeting next week."
Meanwhile, trade tensions intensified as President Donald Trump’s steel and aluminum tariffs took effect. Canada announced retaliatory duties of 25% on more than US$20 billion worth of U.S. goods, while the European Union pledged countermeasures on $28.33 billion worth of U.S. imports, set to take effect in April.
On the bond markets, yields on the 10-year and 2-year Treasury notes lifted 0.8% and 1% to 4.316% and 3.989%, respectively.
