Nasdaq and S&P 500 Close Higher as Cool Inflation Data Eases Concerns about Tariffs

U.S. equities rose Wednesday as the escalation of U.S. President Donald Trump’s chaotic, multifront trade war held gains in check, and cooler-than-expected inflation data helped halt a steep purchase.

The S&P 500 and the Nasdaq ended the day higher, benefiting from a strong surge in tech and tech-related momentum companies. The blue-chip Dow closed the day slightly down after vacillating between red and green most of the day.

According to the Labor Department’s Consumer Price Index, consumer prices cooled more than experts had anticipated, which gave confidence that inflation is on the right track and maintained expectations that the US Federal Reserve may lower its key interest rate this year.

According to Greg Bassuk, CEO of AXS Investments in New York, we’re witnessing a rebound today due to the lower-than-expected inflation and some dip in purchasing. However, Main Street and Wall Street are still searching for guidance.

According to Bassuk, the current trade war conflict reduces investors’ optimism that inflation will slow. Because of this, we firmly believe the unpredictability and instability will be here most of March.

Canada and Europe increased their retaliatory tariffs on U.S. exports in response to Trump’s 25% charges on imported steel and aluminum, his most recent tariff volley.

The intensifying tit-for-tat tariff conflicts between the US and its trading partners have placed pressure on U.S. stocks, causing investors to become uneasy and raising concerns that the ensuing price shocks might send the US, Canada, and Mexico into a recession.

J.P. Morgan believes the likelihood of a U.S. recession is growing, while Goldman Sachs reduced its year-end prediction for the S&P 500. The S&P 500 is 8.9% behind its record closing high, which was attained less than a month ago, following Wednesday’s rise. For the first time since November 2023, the bellwether index fell below its 200-day moving average on Monday, which is seen as a crucial support level.

The tech-heavy Nasdaq confirmed that it has been in a correction since December 16, when it fell more than 10% below its record closing high on March 6. The S&P 500 gained 27.23 points, or 0.49%, to 5,599.30, the Nasdaq Composite climbed 212.36 points, or 1.22%, to 17,648.45, and the Dow Jones Industrial Average dropped 82.55 points, or 0.20%, to 41,350.93.

Among the S&P 500’s 11 major sectors, technology shares were the biggest winners, while consumer staples and healthcare were the worst-performing sectors. According to a report, TSMC approached Nvidia, Advanced Micro Devices, and Broadcom about investing in a joint venture to run the U.S. chip company’s plants, which caused Intel to surge 4.6%. After stockbroker Jefferies reduced its rating on PepsiCo from “purchase” to “hold, “its shares slid 2.7%.

More uncertainty was introduced as lawmakers on Capitol Hill continued to struggle over a stopgap budget plan in an attempt to prevent a government shutdown. On the NYSE, advancing items were 1.15 times more numerous than declining ones. The NYSE saw 186 new lows and 29 new highs. One thousand seven hundred eighty-five stocks sank, and 2,589 stocks climbed on the Nasdaq as advancing issues outpaced decliners by a ratio of 1.45 to 1.

While the Nasdaq Composite had 26 new highs and 200 new lows, the S&P 500 saw no new 52-week highs and 18 new lows. In contrast to the average of 16.59 billion shares for the whole session during the previous 20 trading days, the volume on U.S. exchanges was 16.14 billion.