By Sinéad Carew
NEW YORK (Reuters) -Global stocks rose on Wednesday with U.S. Treasury yields as relief over cooler U.S. inflation in February was countered by uncertainty around U.S. President Donald Trump’s tariff policies and their potential impact on inflation and global growth.
Oil prices settled higher after data on slower stockpile builds, while the euro pulled back slightly after hitting a five-month high in the previous day’s session on hopes for a ceasefire between Ukraine and Russia.
Wednesday’s U.S. Department of Labor data showed the Consumer Price Index rose 2.8% on an annual basis in February, below the 2.9% forecast from economists polled by Reuters. On a monthly basis, it rose 0.2% after accelerating 0.5% in January and versus economists’ estimate of 0.3%.
The S&P 500 opened higher but then lost steam in morning trading. It returned to positive territory before midday and stayed there for the rest of the session.
“It’s maybe some liquidity coming back into the market,” said Paul Christopher, head of global market investment strategy for Wells Fargo Investment Institute in St. Louis, Missouri.
“What we’re seeing is some money coming back in buying the dip. That’s a good sign.”
While investors were relieved that inflation was lower than expectations, Christopher said that strength in services price increases also showed that the economy was still solid.
On Wall Street the Dow Jones Industrial Average fell 82.55 points, or 0.20%, to 41,350.93, the S&P 500 rose 27.23 points, or 0.49%, to 5,599.30 and the Nasdaq Composite rose 212.36 points, or 1.22%, to 17,648.45.
But investors were still wary of U.S. trade policy and the impact that could have on inflation going forward.
“Today’s inflation report is obviously good news but it’s also backward-looking and doesn’t tell us anything about where we’re headed from here and what the inflationary impact of all these tariffs might be,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors.
Investors had to scramble to keep up with events on Tuesday after Trump threatened to double steel and aluminium tariffs on Canada to 50%, then reversed course later in the day.
“The hard part is the uncertainty around tariffs,” said Baird. “It’s one thing to understand that the rules of the game are changing, but understanding what those rules will be and when they’ll be clearly defined is another thing entirely.”
Trump threatened on Wednesday to escalate a global trade war with further tariffs on European Union goods
