US Stocks Rebound Ahead of CPI Data March 2025
The rebound in US stocks comes as a result of easing inflation concerns, with the consumer price index rising less than expected in February, and the Federal Reserve potentially cutting interest rates later this year. The technology sector saw significant gains, with semiconductor stocks leading the way, and the US Dollar Index retreating from session highs after the data release.
The S&P 500 and Nasdaq experienced a rebound on Wednesday, with the S&P 500 gaining 0.3% and the Nasdaq advancing 0.9%, as the consumer price index rose 0.2% in February, lower than expected, easing concerns about inflation and stagflation.
Technology shares saw significant gains, with the semiconductor ETF rising 5%, Intel jumping 3%, and AMD rising 6%. The Federal Reserve may still cut interest rates later this year if necessary, despite trade policy concerns remaining, with Trump's steel and aluminum tariffs taking effect and Canada imposing tariffs on US goods. Altimeter Capital's Brad Gerstner has taken a cautious approach, waiting out the uncertainty.
The semiconductor ETF is on pace for its best day since September, and Loop Capital has upgraded Crocs to "buy" from "hold," citing a buying opportunity due to the volatility around tariffs. The CPI report has boosted stocks, with the S&P 500 adding 200 points, or 0.5%, and the Dow Jones industrial average rising 1%. Consumer prices rose less than expected in February, with the CPI increasing 0.2% and the core CPI rising 0.2%.
The US CPI inflation softens to 2.8% in February, below market expectation of 2.9%, and the core CPI rose 3.1% on a yearly basis, below 3.2% forecast. The US Dollar Index retreated from session highs after the data release, and the EUR/USD pair pushed intraday lows below 1.0900 after the softer-than-anticipated inflation data.
