Nasdaq pops 2%, S&P 500 soars 1% as tech stocks surge after soft inflation print

Tech stocks which had been under pressure due to concerns over rising borrowing costs, responded swiftly to the softer inflation print.

Wall Street indices extended their early recovery, with the Nasdaq Composite leading from the front by mid-trade on March 12.  A softer-than-expected inflation report that eased investor concerns over economic stability and reignited interest in battered technology stocks. The tech-heavy Nasdaq Composite jumped 1.7 percent, while the S&P 500 added 0.9 percent. The Dow Jones Industrial Average saw a more modest gain, trading slightly higher by mid-session.

Chipmaker Nvidia led the charge, climbing 6 percent as investors flocked back to high-growth tech stocks. Meta Platforms and Tesla also saw strong gains, rising 2 percent and 7 percent, respectively.

The rally came after the latest Consumer Price Index (CPI) report revealed a milder-than-expected inflation increase. The CPI rose 0.2 percent in February, bringing the annual inflation rate to 2.8 percent. Both figures were below Dow Jones estimates of 0.3 percent and 2.9 percent, respectively. The core CPI, which strips out volatile food and energy prices, also undershot expectations, rising 0.2 percent for the month and 3.1 percent over the past 12 months.

The better-than-expected data provided a welcome relief to markets, reinforcing optimism that the Federal Reserve may have room to adjust its monetary policy in the coming months. Investors have been closely watching inflation trends amid concerns Trump's tariff plans could cause an uptick in persistent price pressures, forcing the Fed to maintain higher interest rates for longer, potentially slowing economic growth.

Tech stocks which had been under pressure due to concerns over rising borrowing costs, responded swiftly to the news.

Despite that, market sentiment remains cautious as escalating trade tensions continue to threaten economic stability. President Donald Trump’s steel and aluminum tariffs took effect on Wednesday, triggering immediate retaliation from key trading partners. Canada announced 25 percent retaliatory duties on over $20 billion worth of US goods, while the European Union pledged counter-tariffs on 26 billion euros ($28.33 billion) worth of US imports starting in April.

Stocks have been under pressure amid fears that rising trade tensions could tip the US into recession. Concerns over Trump’s unpredictable trade policies have already fuelled worries about an economic scenario marked by slow growth and high inflation.

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