• A softer-than-expected inflation report offered some relief, but trade policy uncertainty persisted.
• Major indexes are poised for significant weekly losses. The S&P 500 briefly entered correction territory on Tuesday. On Wednesday, the S&P 500 and Nasdaq climbed, while the Dow slipped. Tech stocks, led by Nvidia, surged, lifting market sentiment.
• Inflation came in below expectations. Investors awaited the PPI report. Retaliatory tariffs from Canada and the EU heightened trade disruption concerns. The U.S. budget deficit surpassed $1 trillion.
• European markets turned higher, despite trade policy pressures. Asian markets declined, despite positive U.S. inflation data.
• Treasury yields were little changed as investors awaited wholesale price data.
• Gold Prices hovered near record highs, driven by safe-haven demand. Oil Prices were volatile, balancing tariff-driven uncertainty with tighter U.S. fuel inventories. Aluminum Premiums soared to record highs amid tariff threats.
• Stocks were under pressure due to concerns about trade tensions and potential stagflation. Investors were rotating capital out of U.S. markets. Despite market volatility, some analysts downplayed concerns about economic distress.

Stock futures edged lower on Thursday as investors awaited another key inflation report. All three major indexes are poised for significant weekly losses, with the S&P 500 and Nasdaq down approximately 3%, and the Dow falling 3.4% — on track for its worst week since March 2023. On Tuesday, the S&P 500 briefly entered correction territory, dropping 10% from its February record high.

A softer-than-expected U.S. inflation report offered some relief to investors, who have been unsettled by rapidly shifting trade policy announcements from the White House. A continued decline in inflation could give the Federal Reserve room to cut interest rates if economic conditions deteriorate. While the inflation data sparked optimism, easing recession fears, economists caution that new tariffs could quickly drive consumer prices higher.

US Market Previous Day:

The major U.S. indices delivered a mixed performance by Wednesday’s close, with the S&P 500 and Nasdaq 100 climbing on the back of a rally in technology and tech-related stocks, while the Dow Jones Industrial Average slipped after a volatile session. Markets largely rebounded following a softer inflation report, which helped ease concerns about the economic outlook. The S&P 500 rose 0.49% to close at 5,599.30, the Nasdaq Composite jumped 1.22% to 17,648.45, and the Dow shed 82.55 points, or 0.2%, to finish at 41,350.93.

(Source: TradingView.com)

Despite the tech sector being down more than 3% for the week, it led the S&P 500’s gains on Wednesday. Nvidia surged 6.4%, AMD climbed over 4%, Meta Platforms advanced 2%, and Tesla soared more than 7%, helping lift sentiment across the broader market.

US Futures in Red:

• Dow Jones Industrial Average futures declined by 0.3%
• S&P 500 futures showed losses of 0.39%
• Nasdaq Composite futures lead the pack with losses of 0.59%.

Key Economic Data/News:

The U.S. consumer price index (CPI) rose 0.2% in February on a seasonally adjusted basis, bringing the annual inflation rate to 2.8%, according to the U.S. Bureau of Labor Statistics. Core CPI, which excludes food and energy, also climbed 0.2% for the month, with a 12-month increase of 3.1% — the lowest reading since April 2021. Both figures came in 0.1 percentage points below economists’ expectations, according to a Dow Jones survey.

Investors are now turning their attention to Thursday’s producer price index (PPI) release, a key measure of inflationary pressures based on production costs. The Bureau of Labor Statistics will publish the data at 8:30 a.m. ET, with economists projecting a 0.3% month-over-month increase.

Meanwhile, geopolitical tensions are rising as U.S. President Donald Trump’s 25% tariffs on steel and aluminum imports took effect Wednesday, prompting swift retaliation from trade partners. Canada announced matching 25% tariffs on over $20 billion worth of U.S. goods, effective Thursday, in addition to previously imposed countermeasures. The European Union also pledged to impose tariffs on $28.33 billion worth of U.S. imports starting in April, further heightening concerns about global trade disruptions.

On the fiscal front, the U.S. budget deficit has already surpassed $1 trillion, reaching $1.15 trillion in the first five months of fiscal 2025 — a record for the period. The shortfall ballooned by over $307 billion in February, more than double January’s figure and 3.7% higher than the same month last year. This comes despite efforts by the Department of Government Efficiency, led by President Trump and Elon Musk, to curb spending through widespread agency job cuts.

Earnings Season/Company News:

Intel announced on Wednesday the appointment of Lip-Bu Tan as its new CEO, replacing interim co-CEOs David Zinsner and MJ Holthaus, who stepped in after former CEO Patrick Gelsinger’s departure in December. Tan, the former CEO of Cadence Design Systems — a key software provider for major chip designers, including Intel — brings extensive industry expertise to the role. Shares of Intel surged as much as 12% in extended trading following the announcement.

Meanwhile, American Eagle cautioned that consumers are pulling back on spending, despite beating fourth-quarter earnings expectations and meeting sales estimates. The retailer noted a “slower start” to the year than anticipated, sending its shares down more than 5% in after-hours trading. Investors will be closely watching more retail earnings on Thursday, with Dollar General set to report before the opening bell and Ulta Beauty scheduled to release results after market close.

Global Market Trends:

European markets turned higher on Thursday morning, despite ongoing pressure from U.S. trade policies straining global trade relationships. The pan-European Stoxx 600 was flat, with the auto sector remaining in the red as traders assessed the impact of new U.S. tariffs and retaliatory measures from the European Union, Canada, and other key partners. On Wednesday, the Stoxx 600 snapped a four-day losing streak, buoyed by hopes of a Ukraine-Russia ceasefire and lower-than-expected U.S. inflation data.

Asia-Pacific markets declined on Thursday, even as softer U.S. inflation data helped two of Wall Street’s three major indexes rebound from earlier losses. Japan’s Nikkei 225 finished flat at 36,790.03, while the broader Topix index edged up 0.13% to 2,698.36. Shares of Seven & i Holdings climbed as much as 3.6% following Alimentation Couche-Tard’s announcement about acquiring the 7-Eleven operator.

South Korea’s Kospi ended flat at 2,573.64, while the small-cap Kosdaq fell 0.92% to 722.80, reversing earlier gains. In China, the Hang Seng Index dipped 0.57% to 23,463.26, and the CSI 300 declined 0.40% to 3,911.58 amid choppy trading. Australia’s S&P/ASX 200 dropped 0.48% to close at 7,749.10 — its third straight day of losses.

Debt Market:

(Source: TradingView.com)

U.S. Treasury yields were little changed on Thursday as investors awaited key wholesale price data. The benchmark 10-year yield edged up 2 basis points to 4.335%, while the 2-year yield rose just under 0.4 basis points to 3.999%. With inflation data and newly imposed tariffs from President Trump in focus, investors are closely watching how the Federal Reserve will navigate potential rate cuts at its upcoming March 19–20 meeting.

Commodities and Other Assets:

Gold prices hovered near record highs, driven by safe-haven demand amid rising tariff concerns and expectations of future Fed rate cuts. The metal remains supported by fears of a tariff-induced economic slowdown, which could accelerate the Fed’s timeline for easing monetary policy. A softer-than-expected producer price index (PPI) report could boost gold’s gains, while a hotter reading may cap the rally as traders reassess rate-cut expectations.

Oil prices were volatile as traders weighed tariff-driven economic uncertainty against tighter U.S. fuel inventories. Crude prices climbed around 2% on Wednesday after government data revealed larger-than-expected draws in gasoline and distillate stocks — with gasoline inventories falling by 5.7 million barrels, well above the anticipated 1.9 million barrel decline. However, concerns over weakened global demand due to trade tensions persisted, especially as the International Energy Agency (IEA) projected a 600,000 barrel-per-day supply surplus for 2025. Compounding this, OPEC+ reported a sharp increase in February production, led by Kazakhstan, raising questions about compliance with output targets despite plans to unwind production cuts.

Aluminium premiums in the U.S. soared to record highs, climbing nearly 60% since the start of 2025, amid looming tariff threats. The U.S. Midwest duty-paid premium exceeded 40 cents per pound (close to $900 per metric ton), as buyers priced in added costs for transport, handling, and potential new tariffs on metal imports used across transportation, construction, and packaging industries.

(Source: TradingView.com)

Bitcoin remained flat on Thursday, stabilizing after recent losses as softer inflation data provided modest support. However, gains were limited by ongoing trade war fears and recession risks. The cryptocurrency had dipped below $80,000 earlier this month as risk aversion intensified. Sentiment was also mixed following Trump’s announcement of a U.S. Bitcoin reserve, which failed to excite markets. Still, dip-buying and cautious optimism for more favorable regulation helped Bitcoin stage a mild recovery.

Market Sentiment:

Stocks have been under pressure as traders worry that escalating trade tensions could tip the U.S. economy into recession. The recent market sell-off has been driven in part by concerns that President Trump’s unpredictable trade policies could spark stagflation — a combination of rising inflation and slowing economic growth.

Investors have been rotating capital out of U.S. markets and into regions like Europe, Japan, and Canada, contributing to dollar weakness as funds flow back to their home countries. While most analysts are not currently forecasting a recession, the probability of one occurring in the U.S. has increased compared to last year’s estimates.

Despite the market volatility, former U.S. Treasury Secretary Steven Mnuchin downplayed concerns on Wednesday, stating that a “natural, healthy correction” in stocks doesn’t necessarily signal economic distress — even as the nation’s budget deficit surged to $1 trillion in February.