By STAN CHOE, Associated Press Business Writer
NEW YORK (AP) — Wall Street got some relief Wednesday after an encouraging report said inflation slowed last month by more than expected, and the U.S. stock market is scraping back a chunk of its sharp losses from recent weeks.
The S&P 500 was 1.2% higher in early trading, a day after it briefly fell more than 10% below its all-time high set last month. The Dow Jones Industrial Average was up 145 points, or 0.4%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 2% higher.
Companies in the artificial-intelligence industry were leading the way, after recently getting crushed by worries their prices had gone too stratospheric in the market’s run to record after record in recent years. Nvidia climbed 6.4% to trim its loss for the year so far to 13.8%. Server-maker Super Micro Computer rallied 6.8%, and GE Vernova, which is helping to power AI data centers, rose 5.8%.
Elon Musk’s Tesla, whose price had more than halved since mid-December, was heading toward its first back-to-back gain in a month. It added 7.8%.
It’s a respite for the stock market, which has been rocked in recent weeks by a barrage of on -again- off -again announcements on tariffs by President Donald Trump. On Tuesday, for example, Trump said he would double tariffs announced on Canadian steel and aluminum, only to walk it back later in the day after a Canadian province pledged to drop a retaliatory measure that had incensed Trump.
The U.S. president still imposed on Wednesday 25% tariffs on steel and aluminum coming into the country, and trading partners around the world have already begun announcing their countermeasures. The European Union, for example, is targeting U.S. motorcycles and bourbon, along with steel and other products.
The question hanging over Wall Street is how much pain Trump will let the economy endure through tariffs and other policies in order to get what he wants. He’s said he wants manufacturing jobs back in the United States, along with a smaller U.S. government workforce, more deportations and other things.
Wednesday’s inflation report gave some encouragement when worries are high that Trump’s tariffs could drive prices even higher for U.S. households after U.S. importers pass on the costs to their customers.
It’s also good news for the Federal Reserve, which had been cutting interest rates last year to boost the economy before pausing this year. Worries had been rising about a worst-case scenario for the economy and for the Fed, one where growth was stagnating but inflation remained high. The Fed has no good tool to fix such “stagflation” because lower interest rates can push inflation higher.
But even if Trump ultimately goes with milder tariffs than feared, damage could still be done. The dizzying, confusing rollout of tariffs has already begun sapping confidence among U.S. consumers and businesses by ramping up uncertainty. That in itself could cause U.S. households and businesses to pull back on spending, which would hurt the economy.
Several retailers and airlines have said they’ve already begun seeing a change in behavior among their customers.
Casey’s General Stores, the Ankeny, Iowa-based company that runs nearly 2,900 convenience stores in 20 states, offered some more encouragement, though. It reported stronger profit and revenue for the latest quarter than analysts expected thanks in part to strength for sales of hot sandwiches and fuel. It also kept steady its forecast for upcoming revenue this year.
Casey’s stock rose 4.9%.
In stock markets abroad, indexes rose across much of Europe after a mixed session in Asia.
In the bond market, Treasury yields climbed to regain more of their losses from recent months sparked by worries about the U.S. economy’s strength. The 10-year Treasury rose to 4.31% from 4.28% late Tuesday and from 4.16% at the start of last week.
AP Business Writer Yuri Kageyama contributed.