Wednesday's whipsaw session came courtesy of the latest inflation data and tariff news. Stocks were mostly higher by the close as market participants swooped in to buy the dip.
The main indexes opened higher across the board today, with sentiment boosted by a cooler-than-expected inflation update. According to the Bureau of Labor Statistics, the Consumer Price Index (CPI) rose 0.2% month over month in February, slower than January's 0.3% rise and economists' projections for a 0.3% increase. Year over year, February CPI was up 2.8%.
Core CPI, which excludes volatile food and energy prices and is seen as a better measure of underlying inflation trends, was up 0.2% from January to February and 3.1% year over year. Both figures were lower than what was seen the month prior and arrived below economists' forecasts.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
"The better-than-expected inflation print will help reduce the recent political noise and calm markets," says Eugenio Alemán, chief economist at Raymond James. "It also reinforces our view that the disinflationary process is alive and well."
Alemán adds that there will likely be "some inflationary impact from tariffs," but in the grand scheme of things, "the disinflationary trend remains intact." And this, he says, is good news for the Fed.
Retaliatory tariffs temporarily weigh on stocks
Still, stocks had slumped to their session lows by mid-morning after the European Union and Canada said they will impose retaliatory tariffs on U.S. imports to counter the 25% tax the Trump administration imposed on steel and aluminum tariffs Wednesday.
The EU, for one, announced its plans for 50% tariffs on roughly $28 billion worth of U.S. products, including whiskey and motorcycles. And Canada said it will levy a 25% tariff on $20 billion worth of U.S. imports such as steel, aluminum and computers.
When asked if he plans to respond, President Donald Trump answered "of course."
At the close, the tech-heavy Nasdaq Composite was up 1.2% at 17,648 and the broader S&P 500 was 0.5% higher at 5,599. The Dow Jones Industrial Average, meanwhile, was down 0.2% at 41,350.
Beaten-down stocks bounce
The Nasdaq's outperformance came as several beaten-down large- and mega-cap stocks bounced. Nvidia (NVDA), for instance, surged 6.4%, while Tesla (TSLA) gained 7.6%. The pair was down 19% and 43% for the year to date heading into Wednesday's session.
And Palantir Technologies (PLTR), which had plunged 22% in the past three weeks, jumped 7.2% after the data analytics firm said it will unveil a slate of new customers at its sixth annual AIPCon, which will be live-streamed tomorrow, March 13.
The announcement "suggests that the company's commercial momentum has continued," says William Blair analyst Louie DiPalma, who adds that the featured logos "span a wide range of industries."
Verizon stock drops on downgrade
Several notable blue chip stocks put pressure on the Dow today, including Verizon Communications (VZ). The telecom tumbled 2.0% after Wolfe Research analysts downgraded it to Peer Perform from Outperform, the equivalents of Hold and Buy, respectively.
"While we remain constructive on Verizon's opportunity to regain Consumer postpaid phone subscribers, capture the fixed wireless access opportunity, and sell perks into its base, we are concerned about the rising cost to gain new customers via phone subsidies and upgrades," the analysts wrote.
Verizon is now down 7% for the week to date after its chief revenue officer on Tuesday forecast a "challenging quarter ahead" due to intense competition.
Related content
- 5 of Warren Buffett's Best Investments
- Stock Market Trading Hours: What Time Is the Stock Market Open Today?
- How to Spring Clean Your Portfolio
-
Thinking of a New Car in Retirement? Why GM's Latest News MattersThe retirement car conundrum: buy outright or finance your next ride?
-
How the New $250 Visa Integrity Fee Could Impact US TravelersA new $250 visa integrity fee will soon be levied on some visitors to the US. The ripple effect could impact Americans, too.
-
Dow Leads as Merck, Amgen Gain: Stock Market TodaySecond-quarter earnings season remained top of mind Tuesday, with Coca-Cola and GM among those reporting.
-
GM Not Planning to Raise Car Prices Despite Tariff Hit, CFO SaysCar Prices GM stock's second-quarter earnings said the company took a $1 billion hit from tariffs, but the CFO said they won't raise prices on cars.
-
5 Ways Portfolios Have Been Impacted In Trump's First Six Months in OfficePresident Trump's first six months in office have kept investors on their toes thanks to whipsaw tariff policies and a massive tax cut and spending bill.
-
We Check on Our Favorite Bond Funds Amid Tariff VolatilityBond volatility has ramped up amid debt and inflation worries. Most of our top bond ETFs are outperforming, while one laggard presents a unique opportunity.
-
Are You a Doormat at Work? The Hidden Cost of Excessive People-PleasingI talked to the author of the upcoming book 'Fawning,' and she explains how the 'fawn' response can lead to blurred boundaries, difficulty asserting needs and a loss of self, with serious emotional consequences like anxiety and PTSD.
-
A Guide to Personalizing Your Retirement Plan for Maximum ImpactThis strategy challenges conventional retirement rules of thumb by combining traditional savings, home equity and annuities to provide higher income and liquid savings and help cover long-term care costs.
-
How Advisers Can Rev Up Sales With MedicareHelp boost your revenue stream by integrating Medicare solutions into your financial practice for long-term client value and profits.
-
Stock Market Today: S&P 500 Hits High After Verizon EarningsThe Nasdaq also notched a new high on Monday, while the Dow finished with a marginal loss.
