Global markets climbed on Wednesday, supported by a weaker-than-expected U.S. inflation report, though lingering concerns over President Donald Trump’s escalating trade policies kept investors cautious. U.S. Treasury yields also ticked higher as traders weighed the potential inflationary impact of tariffs against signs of economic resilience.
Market Optimism Over Cooling Inflation
The latest U.S. Consumer Price Index (CPI) data revealed a 2.8% annual rise in February, falling short of economists’ forecasts of 2.9%. On a monthly basis, inflation rose 0.2%, a notable slowdown from January’s 0.5% jump. The report provided temporary relief to investors concerned about persistent price pressures.
Despite this encouraging data, analysts warned that the inflation reading does not yet reflect the impact of new tariffs. “Today’s inflation report is obviously good news, but it’s backward-looking,” said Jim Baird, Chief Investment Officer at Plante Moran Financial Advisors. “It doesn’t tell us what the inflationary impact of these tariffs might be moving forward.”
Stocks Rally but Remain Volatile
Wall Street experienced a choppy trading session, with the S&P 500 opening higher, dipping in early trading, and then rebounding to close in positive territory.
- Dow Jones Industrial Average: Fell 0.2% (-82.55 points) to 41,350.93
- S&P 500: Gained 0.49% (+27.23 points) to 5,599.30
- Nasdaq Composite: Rose 1.22% (+212.36 points) to 17,648.45
On a broader scale, the MSCI World Index climbed 0.49%, driven by gains in European stocks, where Germany’s DAX rose more than 1%, fueled by optimism over a potential Ukraine-Russia ceasefire and the softer U.S. inflation data. The pan-European STOXX 600 also rebounded, closing 0.81% higher after four consecutive days of declines.
Tariff Uncertainty Clouds Outlook
While markets welcomed the inflation report, trade tensions escalated as President Trump threatened to double tariffs on Canadian steel and aluminum imports to 50%, before reversing course later in the day. Additionally, the European Commission announced €26 billion ($28 billion) in counter-tariffs on U.S. goods, targeting products such as bourbon whiskey, diamonds, and motorcycles.
“The real challenge is the uncertainty around tariffs,” said Baird. “It’s one thing to know that the rules are changing, but understanding what those rules will be and when they’ll be implemented is another challenge entirely.”
Bond Yields and Currency Markets React
Treasury yields edged higher as investors factored in the possibility that tariffs could push inflation upward in the coming months.
- 10-year Treasury yield: Rose 2.8 basis points to 4.316%
- 30-year bond yield: Increased 3.2 basis points to 4.635%
- 2-year note yield: Jumped 5 basis points to 3.991%
In currency markets, the U.S. dollar showed mixed performance. The euro retreated 0.25% to $1.0891, while the yen weakened 0.38% against the dollar, closing at 148.33. The Canadian dollar strengthened 0.45%, reflecting trade tensions with the U.S., while the Russian rouble slipped 1.75% despite briefly hitting a six-month high.
Commodities: Oil and Gold Gain Amid Uncertainty
Crude oil prices climbed as U.S. data indicated tighter fuel inventories than expected.
- U.S. crude: Rose 2.16% (+$1.43) to $67.68 per barrel
- Brent crude: Gained 2% (+$1.39) to $70.95 per barrel
Gold prices also strengthened, benefiting from market uncertainty and softer inflation data.
- Spot gold: Rose 0.53% to $2,931.59 per ounce
- U.S. gold futures: Increased 0.74% to $2,934.40 per ounce
Elsewhere in metals, copper climbed 1.31% to $9,789 per tonne, while aluminum on the London Metal Exchange dipped 0.11% to $2,700 per tonne.
Looking Ahead
As investors navigate the evolving economic landscape, markets will closely monitor further developments on trade policies and inflationary trends. While the latest data provided some relief, uncertainty surrounding tariffs remains a key risk factor for global growth.
Related topics:
Stock Market News – March 10, 2025: Nasdaq Falls 4% After Trump Doesn’t Rule Out Recession
U.S. Stock Futures Decline as Trump Suggests Recession Remains Possible
Stock Market Struggles: Major Indices Hit Critical Support Levels as Volatility Intensifies
