US Market Reaction To CPI Inflation Data: S&P 500, Nasdaq Rise, But Dow Jones Fall; Top Gainers And Losers!

The US stock market took a breather from two-consecutive days selling pressure, and ended on a mixed note on Wednesday, March 13, after CPI inflation data came in softer-than-expected. S&P 500 was marginally up, while Nasdaq Composite index surged sharply 1.2% driven by tech stocks. However, fall in consumer staple stocks dragged Dow Jones.

Wall Street slipped steeply to lowest levels in in over six months from March 10-11, after Trump doubled down on his tariff plans which sparked recession fears for the US economy.

On Wednesday, the Dow Jones Industrial Average index slipped by 82.55 points or 0.20% to close at 41,350.93, while the S&P 500 index edged higher by 27.23 points or 0.49% to finish at 5,599.30. Meanwhile, tech-heavy index Nasdaq Composite climbed sharply by 212.35 points or 1.22% to end at 17,648.45.

Wall Street broadly picked momentum due to better-than-expected CPI print which eased economic concerns. Also, a sharp rebound in battered tech stocks contributed to the upside. Tech stocks saw relentless selling in the previous two sessions.

But the Dow Jones was pressured by the retail giant, Walmart's stock price which toppled by nearly 3%, dragging the overall consumer staples index.

Although the tech index is down by 3% so far in the current week, on Wednesday, key tech stocks witnessed tremendous buying such as Nvidia stock which climbed 6.4%, AMD was up by 4.1%, and Tesla gained by 7.3%, emerging as top contributors to the Nasdaq's rally.

US CPI inflation increased 0.2 percent on a seasonally adjusted basis in February, after rising 0.5 per cent in January, the U.S. Bureau of Labor Statistics reported. Over the last 12 months, the all-items index increased by 2.8 per cent before seasonal adjustment.

The US Labor data added all items less food and energy index rose 3.1 per cent over the last 12 months. The energy index decreased 0.2 per cent for the 12 months ending February. The food index increased by 2.6 per cent over the last year.

The US inflation data comes softer than market estimates of 2.9%. This offered relief to investors.

However, Trading Economics data also added, that President Trump's steel and aluminium tariffs took effect, prompting Canada to impose 25% retaliatory duties on over $20 billion worth of US goods. The European Union also quickly responded, announcing counter-tariffs on €26 billion worth of US imports, set to take effect in April.

On the US market, earlier on Wednesday, Vinod Nair, Head of Research, at Geojit Financial Services said, "Persistent uncertainties surrounding global trade and the fear of a U.S. recession continue to influence the domestic market's momentum. Despite the stabilisation in valuation to the 5-year average and signs of improvement in urban and rural demand, investor risk appetite remains subdued."

The current key concern is whether the ongoing correction happening in the US market can spill over to the global market. The US market is under pressure from weakening economic data and uncertainty over tariff policy, as per Nair.

While US stocks were a mixed bag, the dollar index dipped to 103.4 owing to a CPI reading.

Inflation measures declined more than expected last month, providing some relief to investors. However, the impact of newly imposed tariffs has yet to be felt, and inflation could climb again in the coming months. The Federal Reserve is set to decide on monetary policy next week, with expectations that it will keep the federal funds rate steady while unveiling new economic projections for GDP growth, inflation, and unemployment. Meanwhile, trade tensions continue to escalate after a 25% US tariff on steel and aluminium imports from Canada, Australia, the EU, and other countries took effect on Wednesday. In response, the European Union has announced retaliatory levies on €26 billion worth of U.S. goods, set to begin in April. The greenback strengthened mostly against the Japanese yen, the Canadian dollar and the euro, as per Trading Economics.