The U.S. stock market saw a rebound on Wednesday, with the S&P 500 climbing 0.4%, supported by a 1.2% jump in the tech-heavy Nasdaq 100 and a 0.4% gain in the Dow Jones Industrial Average. The rally was led by NVIDIA Corporation (NASDAQ:NVDA), which surged 8%, as investors capitalized on the recent sector-wide dip.
Investor sentiment was buoyed by better-than-expected inflation data, easing fears of stagflation. The U.S. Consumer Price Index (CPI) slowed to 2.8% year-over-year, lower than the forecasted 2.9%. On a month-over-month basis, inflation cooled to 0.2% from 0.5% in January, signaling a potential pause in aggressive monetary policies.
Trade War Tensions Escalate as Trump Expands Tariffs
Despite the market rally, tariff-related uncertainties continued to weigh on global trade dynamics. President Donald Trump’s newly imposed tariffs on steel and aluminum took effect on Wednesday, prompting retaliatory measures from the European Union and Canada.
The European Commission announced countermeasures, including the reinstatement of suspended tariffs on €8 billion worth of U.S. exports starting April 1. Additionally, Brussels plans to introduce new tariffs on €18 billion of American goods in response to heightened U.S. levies.
Meanwhile, Canada had initially planned a 25% tariff hike on U.S. power exports but later suspended it after high-level trade negotiations.
Intel Gains on Potential Joint Venture with TSMC
In corporate news, Intel (NASDAQ:INTC) surged 4% following reports that Taiwan Semiconductor Manufacturing Company (NYSE:TSM) pitched a joint venture proposal to major U.S. chipmakers, including NVIDIA, AMD (NASDAQ:AMD), and Broadcom (NASDAQ:AVGO).
According to Reuters, TSMC would operate Intel’s foundry business in the U.S., though it wouldn’t own more than 50% of the venture. The proposal awaits Trump administration approval, as Intel continues struggling with weak sales and a loss-making foundry division.
Elsewhere, Amazon (NASDAQ:AMZN) gained over 1% after the Federal Trade Commission (FTC) sought a two-month delay in its lawsuit over Prime membership sign-up practices.
Utilities Lead Global Market Rankings
A recent UBS equity report highlighted that utilities have emerged as the highest-ranking sector globally, surpassing other investment themes.
Using its REVS framework, which evaluates macroeconomic conditions, earnings potential, valuation sentiment, and investor positioning, UBS identified defense and electrification as standout themes in European markets.
Looking Ahead: Key Economic Events to Watch
Markets will now shift focus to upcoming Federal Reserve decisions as inflation trends continue to evolve. The next policy meeting on March 18-19 will provide insight into potential rate adjustments, particularly in response to Trump’s fiscal and trade strategies.
Key highlights to watch:
- U.S. retail sales data for insights into consumer demand.
- Global inflation reports from Russia, Brazil, and the UK.
- A major European Central Bank (ECB) speech that could shape Eurozone monetary policy.
With macroeconomic forces shifting, investors remain on edge about how tariffs, inflation, and central bank policies will shape market movements in the weeks ahead.
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