Market Recap: Wall Street Rebounds Amid Inflation Data and Trade Tensions
Major Indexes Show Mixed Performance
On Wednesday, March 12, 2025, Wall Street experienced a mixed trading session as investors digested the latest inflation data and ongoing trade tensions. The major market indexes showed varied performance by the end of the day.
The S&P 500 (SPX) managed to climb 0.26% to close at 5,586.81, rebounding from its recent dip into correction territory.
Inflation Data Provides Some Relief
A key factor influencing market sentiment was the release of February’s Consumer Price Index (CPI) data. The report showed that inflation rose less than expected, with the CPI increasing by 0.2% for the month and putting the annual inflation rate at 2.8%.
The core CPI, which excludes volatile food and energy prices, also came in lower than expected at 0.2% month-over-month and 3.1% year-over-year.
Trade Tensions Continue to Weigh on Markets
Trade policy uncertainty remains a significant concern for investors, as the implementation of new tariffs has sparked fears of a global trade war. President Trump’s 25% tariffs on steel and aluminum imports took effect, drawing swift retaliation from Canada and the European Commission.
The impact of these trade tensions was evident in the performance of various sectors:
1. Automakers: Ford (F) and General Motors (GM) saw their shares decline by 1.5% and 1.3%, respectively.
2. Airlines: An index tracking airline stocks fell 4.3%.
3. Steel and Aluminum: In contrast, companies like Cleveland Cliffs (CLF) and Alcoa (AA) bucked the downward trend, with their shares rising 8% and 2.5%, respectively.
Technology Sector Leads the Rebound
The technology sector, which has been among the top decliners in 2025, showed signs of recovery on Wednesday. The sector rose 1.4%, helping to lift the Nasdaq.
1. Intel (INTC): Shares jumped 3% following reports that TSMC had pitched a joint venture proposal to operate Intel’s foundry division.
2. Nvidia (NVDA) and Tesla (TSLA): Both stocks gained in pre-market trading, contributing to the Nasdaq’s outperformance.
Upcoming Market Events
Investors are now turning their attention to several key events that could impact market direction:
1. Federal Reserve Meeting: The U.S. central bank’s March meeting is scheduled for next Tuesday and Wednesday. Traders are maintaining bets on a potential 25-basis-point interest rate cut in June.
2. Economic Data: Market participants will be closely watching for additional economic indicators to gauge the health of the U.S. economy and the potential risk of a recession.
3. Trade Negotiations: Any developments in ongoing trade discussions between the U.S. and its trading partners will be crucial for market sentiment.
Looking Ahead
As Wall Street navigates through these uncertain times, analysts remain cautious about the market outlook. The recent volatility has erased more than $4 trillion in market value, wiping out all gains made since President Trump’s election.
While some see the current pullback as a potential buying opportunity, others advise caution. Warren Pies, co-founder of 3Fourteen Research, suggests that it might not be time to “buy the dip” just yet, as markets await policy responses from the Federal Reserve or the administration.
As investors navigate this challenging environment, they will need to balance the positive signals from inflation data against the ongoing concerns about trade policy and economic growth. The coming days and weeks will be crucial in determining whether the recent market turbulence is a temporary setback or the beginning of a more prolonged downturn.
