US Stock Market Rises on February CPI Relief... S&P500 and Nasdaq Start Higher

Nvidia, Tesla, Intel, Palantir and Others Rise

On the 12th (local time), the US stock market showed recovery from a three-week decline. Some investors bought up technology stocks like Nvidia, Tesla, and Meta Platforms that had fallen sharply, taking comfort in the inflation report that showed slower-than-expected growth.

Around 10:10 AM Eastern Time, the S&P500 rose 0.6%. The Nasdaq Composite gained 1.4%. The Dow Jones Industrial Average, which had started higher, reversed to a 0.2% decline.

Nvidia jumped 6% while Tesla surged 8%. Intel rose 6% following news that TSMC had proposed joint investment from Nvidia, Broadcom, and AMD in Intel Foundry. TSMC's American Depositary Receipts increased by 3.8%, Broadcom by 4%, and AMD by 2.6%. Palantir and Supermicro also saw significant gains of 5.7% and 7.8% respectively.

The 10-year Treasury yield rose 3 basis points (1bp=0.01%) to 4.31%. The Bloomberg Dollar Index climbed 0.2%.

The February Consumer Price Index rose 0.2% for the month, recording 2.8% year-over-year. The core consumer price index similarly increased by 0.2%, reaching an annual rate of 3.1%. Both figures came in below economists' expectations.

One of the recent reasons for selling US stocks was concern that President Trump's unstable trade policies would lead to stagflation by increasing inflation and slowing growth. The CPI report alleviated these concerns. However, economists pointed out that the February report preceded the effects of tariffs.

Warren Pies, co-founder of 3Fourteen Research, said in an interview with CNBC, "Policy responses from the Federal Reserve or the administration will be somewhat delayed," adding that he doesn't think it's time to buy the dip yet.

The 25% tariff on steel and aluminum imported to the US took effect from midnight on the 12th.

In response, the EU announced it would impose tariffs worth approximately 41 trillion won on US products starting in April. Reuters reported that Canada would also implement tariffs on US products worth about 30 trillion won.

Goldman Sachs Group strategists lowered their target for the S&P500 this year from 6,500 points to 6,200 points. The strategists explained, "This reflects the increased level of uncertainty due to downward revisions in US GDP growth forecasts, higher tariff rates, and rising equity risk premiums."

Kim Jung-a, Contributing Writer kja@hankyung.com