Stocks rebound Wednesday. Will cooler inflation top trade war fears?
Trump buys a Tesla purchase amid Tesla stock drops
President Donald Trump bought a Tesla in show of support of Elon Musk and said it’ll be used at the White House.
Stocks roared higher at the open Wednesday as a cool inflation reading outweighed lingering concerns about a simmering trade war.
The S&P 500 jumped 63 points, or 1.1%, to trade near 5,635, while the Dow Jones Industrial Average added 123 points or 0.3% and traded near 41,557. The tech-focused Nasdaq jumped nearly 2%, and was trading near 17,771, for a gain of about 335 points. The benchmark 10-year U.S. Treasury note traded near 4.32
Consumer prices rose 2.8% over the past year in February, the Labor Department said Wednesday. That was lower than the 3% yearly gain in January, and snaps a four-month stretch of annual price gains. CPI is still much higher than the Federal Reserve’s 2% goal, however, and many analysts believe tit-for-tat tariffs will keep prices elevated.
President Donald Trump‘s increased tariffs on steel and aluminum imports went into effect Wednesday after several days of negotiations and threats with trading partners. The Associated Press reported Wednesday morning that Canada will levy an additional round of tariffs in the latest trade war salvo.
On Wednesday, a measure of volatility in the stock market retreated. The CBOE Volatility Index, or VIX, sometimes called the “fear index,” was down 6%, after surging nearly 60% over the past month.
“VIX clearly says US stocks are oversold enough that they should bounce here and, even with all the policy uncertainty swirling in Washington, it seems a stretch to compare those issues to 2022’s European land war/oil price spike and aggressive Fed policy,” wrote Nicholas Colas, co-founder of DataTrek Research, in a Tuesday note.
“The bull market that started in October 2022 may be on pause, but it’s way too early to say that it has morphed into a full blown bear,” Colas added.
Shares of Tesla, Inc., which have been battered by protests over chairman Elon Musk’s role in federal government layoffs, rebounded more than 7% Wednesday morning.
Vera Bradley Inc. shares slid more than 17% after a big earnings miss.
Intel Corporation shares gained more than 6% after the bell after Reuters reported that several chipmakers are considering buying the company’s foundry division.
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