TLDR
- Markets show volatility with tech stocks rebounding after a period of uncertainty
- Inflation data, particularly CPI and upcoming PPI reports, continues to influence market sentiment
- Trump’s tariff policies are causing significant market reactions, with Canada and EU implementing counter-tariffs
- Nasdaq 100 is finding technical support around the 19150-19400 region with potential for recovery
- Tech megacaps like Nvidia and Tesla posted strong gains (6.4% and 7.6% respectively) in recent trading
Wall Street is experiencing a period of market volatility. Tech stocks are showing signs of recovery. This comes after days of uncertainty driven by inflation concerns and tariff announcements.
The Nasdaq Composite increased by 1.2% in recent trading. The S&P 500 rose about 0.5%. Meanwhile, the Dow Jones Industrial Average ended slightly down by 0.2% after changing direction earlier in the session.
Tech megacaps led the bounce back. Nvidia shares jumped more than 6% to close above $115. Tesla showed even stronger performance with a 7.6% rally. AMD also made gains, rising 4.1% and climbing back above the $100 mark.
These rebounds offer hope that markets might be stabilizing. However, traders remain cautious about declaring a full recovery. More evidence is needed to confirm that the market has reached its low point.
Inflation data is playing a key role in market movements. The Bureau of Labor Statistics released figures showing the “core” Consumer Price Index rose 3.1% in February. This marks a decrease from the 3.3% reported in the previous month.
This cooling in inflation provided some relief to investors. It represents the lowest yearly increase in core CPI since April 2021. Market participants are now looking ahead to the Producer Price Index data.
Both headline and core PPI are expected to show monthly increases of 0.3% each. This data carries extra weight because it often correlates closely with the Federal Reserve’s preferred inflation gauge, the Core PCE Price Index.
Investors will also be watching Friday’s University of Michigan consumer confidence surveys. Last month’s survey showed a sharp drop in consumer confidence. This raised worries about how Trump’s trade policies might be affecting economic sentiment.
The inflation expectations component of the survey will be of particular interest. It jumped from 3.3% to 4.3% in the previous report. High inflation expectations can contribute to persistent price pressures in the economy.
Inflation data doesn’t fully account for new tariff policies
One caveat about the recent inflation data is its timing. February’s figures don’t fully account for the effects of Trump’s new tariff policies. These could potentially push prices higher in coming months.
The Federal Reserve is unlikely to rush into interest rate cuts. Policymakers need to see a longer trend of favorable inflation data before making any major moves. They’re also considering the uncertain impact of trade and immigration policies.
Tariffs have become a central concern for market participants. President Trump’s steel and aluminum tariffs took effect on Wednesday. They prompted immediate responses from trading partners.
Canada announced new tariffs on $21 billion worth of US goods. The European Union has also prepared counter-tariffs on $28 billion in US exports, set to begin in April. These trade tensions are adding to market uncertainty.
Market reactions have been swift to any tariff-related news. Stocks have dropped on tariff threats and rebounded when more positive trade comments emerge. Trump’s shifting stance on Canadian tariffs helped fuel yesterday’s comeback in US indices.
Nasdaq testing major support
From a technical perspective, the Nasdaq 100 has found support in the 19150-19400 range. This area coincides with the 61.8% Fibonacci retracement level from the last major rally that began in August. With the daily Relative Strength Index now in oversold territory, conditions may favor a rebound.
If buying momentum increases, the index could face resistance at 19765, then at the psychologically important 20,000 level. The 200-day moving average sits around 20385. However, if selling resumes, support could be tested at 18,800 or possibly at the 78.6% Fibonacci level of 18437.
Overall, while markets remain on edge, the recent tech rally combined with cooling inflation may provide enough support for a market recovery. Traders will be closely watching how tariff policies evolve and what the upcoming economic data reveals about inflation trends.
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