Traders found relief in a cooler-than-expected inflation report, driving tech-heavy indices to a rebound on Wednesday despite ongoing trade tensions.

In February, the Consumer Price Index declined from 3% year-over-year to 2.8%, beating analysts' expectations of a slowdown to 2.9%. Core inflation also dropped more than anticipated, easing from 3.3% to 3.1%.

The decline was supported by contractions in key categories, with gasoline prices falling 1% month-over-month and transportation costs down 0.8%. Airline fares saw a sharper drop, contracting by 4%.

The softer inflation data strengthened expectations for Federal Reserve rate cuts, with traders now assigning nearly an 80% probability of a reduction by June, according to CME's FedWatch Tool.

While inflation relief fueled optimism, trade concerns lingered. The U.S. imposed 25% tariffs on steel and aluminum in April, prompting swift retaliation. In response, the EU introduced tariffs on €26 billion worth of U.S. goods, while Canada imposed additional levies on $29.8 billion, supplementing previous penalties.

The S&P 500 rose 0.6%, while the Nasdaq 100 jumped 1.2%, aiming to break a two-session losing streak. In contrast, the Dow remained flat.

Treasury yields remained flat on the day, while gold climbed 0.8% to $2,940 per ounce, now just 0.5% below its all-time high.

Bitcoin (CRYPTO: BTC) edged down 0.8%.

Wednesday’s Performance In Major US Indices

According to Benzinga Pro data:

Wednesday’s Stock Movers

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