U.S. stocks gave up early gains to trade mixed late morning Wednesday as lingering concerns about the simmering trade war seemed to outweigh a cool inflation reading.
The broad S&P 500 was down 8 points or 0.2%, trading near 5,564, while the Dow Jones Industrial Average slid 336 points or 0.8%, to about 41,097. The tech-focused Nasdaq was 0.4% higher, adding 67 points to trade near 17,503. The benchmark 10-year U.S. Treasury note traded near 4.29.
Consumer prices rose 2.8% over the past year in February, the Labor Department said Wednesday. That was lower than the 3% yearly gain in January, and snapped a four-month stretch of annual price gains. CPI is still much higher than the Federal Reserve’s 2% goal, however, and many analysts believe tit-for-tat tariffs will keep prices elevated.
President Donald Trump‘s increased tariffs on steel and aluminum imports went into effect Wednesday after several days of negotiations and threats with trading partners. The Associated Press reported Wednesday morning that Canada will levy an additional round of tariffs in the latest trade war salvo.
“Instead of saying we’re back off to the races, we would use this opportunity to dial back risk,” said Keith Lerner, chief market strategist and co-CIO for Truist. The bank cautioned in late February that a “modest deterioration in earnings, technical, and economic trends” might warrant more caution.
Now, Lerner told USA TODAY, anyone who wants to invest more defensively might look to do so on days like Wednesday. “We think we’re going to have a couple months of turbulence,” he said. “I think there will be a point where the market likely will have more balance. There is a patch of fog right now, and one thing we’re seeing from companies is more tepid outlooks.”
Vera Bradley Inc. shares slid more than 17% after a big earnings miss. Shares of Porsche were lower in German trading Wednesday after the car giant issued its second profit warning in as many months.
On Wednesday, a measure of volatility in the stock market retreated. The CBOE Volatility Index, or VIX, sometimes called the “fear index,” was down 3%, after surging nearly 60% over the past month.
“VIX clearly says US stocks are oversold enough that they should bounce here and, even with all the policy uncertainty swirling in Washington, it seems a stretch to compare those issues to 2022’s European land war/oil price spike and aggressive Fed policy,” wrote Nicholas Colas, co-founder of DataTrek Research, in a Tuesday note.
“The bull market that started in October 2022 may be on pause, but it’s way too early to say that it has morphed into a full blown bear,” Colas added.
Shares of Tesla, Inc., which have been battered by protests over chairman Elon Musk’s role in federal government layoffs, rebounded 5% Wednesday.
Intel Corporation shares were about 3% mid-morning after reports that several chipmakers are considering buying the company’s foundry division.
This article originally appeared on USA TODAY: Stocks mixed Wednesday. Will cooler inflation top trade war fears?