US inflation has been slower than expected in February, with core inflation recorded the lowest profit since 2021, but data was collected before President Trump began increasing the tariff war this month.
The consumer price index has risen 2.8% over the past 12 months. The economists expect to see a 2.9% profit, below the surprisingly strong 3% reading last month, the Bureau of Labor Statistics said Wednesday.
The core CPI, which excludes volatile food and energy prices, is 3.1%, the lowest read since April 2021.
Dow Jones Futures rose 223 points (0.5%) on a soft inflation report. S&P 500 futures rose 0.8%, while Nasdaq 100 futures rose about 0.9%.
It's not been reported much hotly as inflation concerns joining President Trump's trade policies quickly fell into the optimism of investors over interest rate cuts.
However, the February report did not capture the impact from Trump's tariffs.
Trump's threatened tariffs in Canada and Mexico are currently on a second 30-day suspension – and his 20% collection on China has prompted fear of inflation and the possibility of a recession.
Duties on Trump's 25% steel and aluminum imports came into effect early Wednesday morning. The European Union announced retaliatory tariffs that will take hold in April.
The rising trade tensions have surprised investors and amazed the instability in the market.
Tesla, Nvidia, Alphabet, Meta, Amazon, Apple and Microsoft's “Magnificent 7” stocks have flown more than $1.5 trillion from their total valuation since their launch in 2025 after enjoying huge profits last year.
Earlier last month, a price report for heated consumers and producers warned that rate hikes could even be on the table.
However, the Personal Consumption Expense Index (Fed's preferred inflation meter) eased inflation later that month.
The Federal Open Market Committee is scheduled to meet on March 18th and 19th, where investors primarily expect to maintain interest rates at a target of 4.25% to 4.5%. According to CME FedWatch.
