February's Consumer Price Index report released Wednesday came in cooler-than-expected and bolstered Wall Street's expectations for rate cuts in the months ahead. Here's a look at economists' reactions to <a href="https://www.benzinga.com/economics/macro-economic-events/25/03/44275575/wall-street-rockets-as-february-inflation-cools-more-than-expected">the latest inflation data.&nbsp;&nbsp;</a>



What To Know: Headline inflation eased slightly to 2.8% year-over-year, and core CPI, which strips out food and energy prices, slowed to 3.1%. Following the inflation print, traders fully priced in three Federal Reserve rate cuts in 2025, according to the CME FedWatch Tool.



Read Next: <a href="https://www.benzinga.com/25/03/44277920/mortgage-applications-soar-as-rates-hit-lowest-level-since-october">Mortgage Applications Soar As Rates Hit Lowest Level Since October</a>



Expert Ideas: Bill Adams, chief economist for Comerica Bank, said that inflation is moving in the "right direction," making it more likely that the Fed will cut rates. Comerica forecasts a single 0.25% interest rate cut in 2025, likely occurring in July.



However, the Fed forecast is hazy given the uncertainty surrounding future Trump administration policies.&nbsp;



"The range of outcomes feels wider than usual given the unpredictability of the policies affecting prices and the job market," Adams said.&nbsp;



Chris Zaccarelli, chief investment officer for Northlight Asset Management, also highlighted the increased economic and geopolitical uncertainty and pointed to the lower rate of inflation, which allows the Fed to support a struggling economy with rate cuts if needed.



"If all of these policy changes lead to a weaker dollar, an increase in geopolitical uncertainty, and a loss of the exorbitant privilege of having the world&#8217;s reserve currency, then many of the lessons that investors have learned over the previous eight decades will need to be forgotten," Zaccarelli warned.&nbsp;



While markets were relieved with the cool inflation report on Wednesday, price increases following the pandemic have added up over the past five years. Charlie Bilello, chief market strategist for Creative Planning, featured a list on social media showing U.S. home prices up 52.3% and auto insurance 55.4% higher.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="500" data-dnt="true">Price Increases over last 5 years&#8230; CPI Medical Care: +12.3% CPI New Cars: +20.3% CPI Shelter: +26.6% CPI Food at home: +27.4% CPI Gasoline: +27.6% CPI Food away from home: +30.1% CPI Electricity: +32.7% CPI Used Cars: +35.1% CPI Transportation: +36.2% CPI Fuel Oil: +41.9% CPI…&mdash; Charlie Bilello (@charliebilello) <a href="https://twitter.com/charliebilello/status/1899809167025516658?ref_src=twsrc%5Etfw">March 12, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Market Reactions: U.S. markets were mixed in late morning trading with the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>), tracking the S&amp;P 500, flat at $555.92 and the Invesco QQQ Trust (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>), tracking the Nasdaq 100, up 0.47% at $473.81.&nbsp;



The benchmark 10-year yield rose slightly to 4.29%. The SPDR Gold Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLD#NYSE">GLD</a>), tracking the price of gold, rose 0.17% to $269.61.&nbsp;



Read Next:



<ul>
<li><a href="https://www.benzinga.com/general/market-summary/25/02/44015237/pending-home-sales-crash-to-record-low-jobless-claims-soar-wall-street-reacts">Pending Home Sales Crash To Record Low, Jobless Claims Soar: Wall Street Reacts</a></li>
</ul>



Image: Shutterstock

Inflation Moves In The 'Right Direction' But Forecast Is Hazy, Economist Says

The <a href="https://www.benzinga.com/topic/magnificent-seven">market&#8217;s biggest tech giants</a>, often referred to as the Magnificent Seven, collectively added over $250 billion in market capitalization during Wednesday morning trading. 



Investors piled back into high-growth stocks following the <a href="https://www.benzinga.com/economics/macro-economic-events/25/03/44274165/inflation-cools-more-than-expected-in-february-strengthens-the-case-for-fed-rate-cuts">softer-than-expected inflation report. </a>



The elite tech group of stocks was in free fall just days ago, down more than 20% from their highs and officially entering a bear market. Since its December 2024 market cap peak of over $17 trillion, Magnificent Seven has shed $3.3 trillion value in recent weeks.



The question now: Is this a true turnaround, or just a temporary relief rally?



<h3 class="wp-block-heading">Investors Rush To Buy Magnificent 7 As Inflation Cools</h3>



The catalyst for the dramatic rebound was February's Consumer Price Index report, which showed inflation cooling faster than expected. 



Headline CPI eased to 2.8% year-over-year, down from 3%, and core CPI slipped from 3.2% to 3.1%, also below forecasts.



The outcome led markets to ramp up bets that the Federal Reserve may soon resume cutting interest rates. With inflation cooling, the CME FedWatch Tool shows traders fully pricing in three rate cuts by year-end.



That was enough to trigger a wave of dip-buying in the battered Magnificent Seven, a group that had entered a technical bear market earlier this week after the Roundhill Magnificent Seven ETF plunged 22% year-to-date.



<h3 class="wp-block-heading">Magnificent Seven Rebound: Nvidia, Tesla Rally</h3>



The total market capitalization change for the Magnificent Seven stocks by 10:30 a.m. ET Wednesday is $258 billion. 



Here's a breakdown with additional context on each company&#8217;s movements:



<ul>
<li>Nvidia Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>) added $151.26 billion as its stock surged 5.7%. The semiconductor giant remains 25% below its record highs set in early January 2025. </li>



<li>Tesla Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TSLA#NASDAQ">TSLA</a>) followed with a $52 billion increase, up 7%. </li>



<li>Meta Platforms Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/META#NASDAQ">META</a>) increased $45.43 billion, climbing 3%.</li>



<li>Amazon.com Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMZN#NASDAQ">AMZN</a>) grew $23.33 billion, up 1.11%. </li>



<li>Alphabet Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/GOOGKL#NASDAQ">GOOGKL</a>) added $14.27 billion, rising 0.7%</li>



<li>Microsoft Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NASDAQ">MSFT</a>) saw a modest $1.41 billion gain, edging 0.1% higher. </li>



<li>Apple Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>) was the only major laggard, shedding $29.19 billion, dropping 0.9%,</li>
</ul>



Read Now: 



<ul>
<li><a href="https://www.benzinga.com/media/25/03/44274410/alibaba-chair-says-ai-total-addressable-market-is-10-trillion-expects-benefits-via-its-cloud-business">Alibaba Chair Says AI Total Addressable Market Is $10 Trillion, Expects Benefits Via Its Cloud Business</a></li>
</ul>



Image: Shutterstock

Equities

Large Cap

Sector ETFs

Econ #s

Tech

ETFs

AAPL

AMZN

MSFT

NVDA

TSLA

GOOGKL

Magnificent 7 Stocks Add $250 Billion In Value After Benign Inflation As Traders Rush To Buy Dips

President Donald Trump is set to nominate Federal Reserve Governor Michelle Bowman as the central bank's vice chair for supervision, according to a source familiar with the decision, Bloomberg <a href="https://www.bloomberg.com/news/articles/2025-03-12/trump-to-announce-bowman-soon-as-nominee-for-fed-s-top-bank-cop?srnd=homepage-americas&amp;sref=TBDibEcD">reports</a>. The nomination could be announced as early as today, marking a significant shift in the Fed's regulatory leadership.



What To Know: This move comes after Michael Barr stepped down from the role earlier this year, citing concerns over a potential conflict with Trump.



Read Also: <a href="https://www.benzinga.com/economics/macro-economic-events/25/03/44274165/inflation-cools-more-than-expected-in-february-strengthens-the-case-for-fed-rate-cuts">Inflation Cools More Than Expected In February, Strengthens The Case For Fed Rate Cuts</a>



In January, Barr stated that the risk of a dispute over the position could divert attention from the Fed's core mission. His departure created a vacancy in one of the most influential regulatory roles overseeing the financial sector.



What Else: Bowman has been a member of the Federal Reserve Board <a href="https://www.federalreservehistory.org/people/michelle-w-bowman">since 2018</a>, with a background in banking regulation and public service. Before joining the Fed, she served as Kansas' state banking commissioner, where she focused on policies affecting community banks. 



Bowman&#8217;s experience also includes roles in the financial sector and government, including a position in the George W. Bush administration. Bowman has been a <a href="https://www.federalreserve.gov/newsevents/speech/bowman20250227a.htm">vocal advocate</a> for reducing regulatory burdens on smaller banks, arguing that rules designed for large financial institutions can be overly restrictive for local lenders.



Read now:



<ul>
<li><a href="https://www.benzinga.com/25/03/44270128/us-recession-probability-escalates-to-35-amid-tariffs-pimco-sounds-alarm" target="_blank" rel="noreferrer noopener">US Recession Risk Surges To 35%, Pimco Cautions On Economic Fallout From Trump's Tariffs</a></li>
</ul>



Photo: Shutterstock

News

Federal Reserve

Trump To Nominate Fed's Michelle Bowman As Top Banking Regulator: Report

Stocks surged Wednesday morning, with major indices poised to snap a two-day losing streak, as cooler-than-expected inflation reinforced expectations for Federal Reserve <a href="https://www.benzinga.com/economics/macro-economic-events/25/03/44274165/inflation-cools-more-than-expected-in-february-strengthens-the-case-for-fed-rate-cuts">rate cuts in 2025</a>.



Futures on major U.S. indices rebounded sharply, with the S&amp;P 500 climbing 1.1% by 9:00 a.m. ET, the Nasdaq 100 jumping 1.6%, and the Dow Jones Industrial Average rising 0.8%. 



Small caps, as tracked by the iShares Russell 2000 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWM#NYSE">IWM</a>), were up 1.2%. 



<h2 class="wp-block-heading">Rate Cut Bets Gain Traction</h2>



The latest Consumer Price Index report showed inflation cooling more than anticipated in February. 



Headline CPI eased to 2.8% year-over-year, coming in below the 2.9% forecast, while core CPI, which strips out food and energy prices, slowed to 3.1%, below expectations of 3.2%



The data strengthened the case for monetary easing, pushing traders to fully price in three Federal Reserve rate cuts in 2025, according to the CME FedWatch Tool.



On the Kalshi event-prediction platform, three rate cuts also emerge as the most likely scenario for 2025. 



<iframe loading="lazy" src="https://kalshi.com/external-widgets/events/KXRATECUTCOUNT-25DEC31?color_scheme=light&#038;widget_size=medium&#038;variant=a&#038;ids=KXRATECUTCOUNT-25DEC31-T2&#038;ids=KXRATECUTCOUNT-25DEC31-T3&#038;ids=KXRATECUTCOUNT-25DEC31-T4" width="488px" height="196px" style="border:0"></iframe>



<h2 class="wp-block-heading">Commodities Surge, Bitcoin Nears $84,000</h2>



Commodity markets reacted strongly to the inflation data, with WTI crude oil climbing 1.6% and copper surging 2.7% to its highest level since May 2024. Silver also gained 1%, while natural gas tumbled 4.4%.



In the cryptocurrency space, Bitcoin (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>) rose 1.4% to approach $84,000, while altcoins saw notable gains—Cardano jumped 5% to $0.7590, and Solana advanced 3% to $129.



<h3 class="wp-block-heading">Top Market Movers</h3>



Nasdaq 100's top five premarket performers:



<ol start="1">
<li>AppLovin Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/APP#NASDAQ">APP</a>) up 11.69%</li>



<li>Palantir Technologies Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PLTR#NYSE">PLTR</a>) up 6.76%</li>



<li>Tesla Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TSLA#NASDAQ">TSLA</a>) up 5.62%</li>



<li>Intel Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/INTC#NASDAQ">INTC</a>) up 5.61%</li>



<li>Marvell Technology Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MRVL#NASDAQ">MRVL</a>) up 4.64%</li>
</ol>



S&amp;P 500's top five premarket performers:



<ol start="1">
<li>Super Micro Computer Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SMCI#NASDAQ">SMCI</a>) up 8.34%</li>



<li>Palantir Technologies Inc. up 6.78%</li>



<li>Intel Corp. up 5.64%</li>



<li>Tesla Inc. up 5.57%</li>



<li>The Cooper Companies Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/COO#NYSE">COO</a>) up 5.52%</li>
</ol>



Dow Jones' top five premarket performers:



<ol start="1">
<li>NVIDIA Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>) up 4.51%</li>



<li>Amazon.com Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMZN#NASDAQ">AMZN</a>) up 2.24%</li>



<li>The Goldman Sachs Group Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GS#NYSE">GS</a>) up 2.08%</li>



<li>Salesforce Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CRM#NYSE">CRM</a>) up 2.04%</li>



<li>JPMorgan Chase &amp; Co. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/JPM#NYSE">JPM</a>) up 1.75%</li>
</ol>



Read now: 



<ul>
<li><a href="https://www.benzinga.com/markets/equities/25/03/44269301/trumps-25-tariffs-on-steel-and-aluminum-imports-take-effect-eu-retaliates-us-steel-nucor-century-aluminum-and-other-domestic-stocks-cheer">Trump&#8217;s 25% Tariffs On Steel And Aluminum Imports Take Effect, EU Retaliates: US Steel, Nucor, Century Aluminum And Other Domestic Stocks Cheer</a></li>
</ul>



Photo: Shutterstock

Cryptocurrency

Macro Economic Events

Broad U.S. Equity ETFs

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INTC

MRVL

PLTR

SMCI

Wall Street Rockets As February Inflation Cools More Than Expected

On Wednesday, Alibaba Group Holding (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BABA#NYSE">BABA</a>) Chairman Joe Tsai voiced the possibility of <a target="_blank" href="https://www.benzinga.com/topic/alibaba" rel="noreferrer noopener">artificial intelligence eliminating</a> the need for equity research analysts while charting a Nvidia Corp (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>) or Apple Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>) report <a target="_blank" href="https://www.cnbc.com/2025/03/12/alibabas-tsai-on-ai-research-analysts-can-be-completely-replaced.html" rel="noreferrer noopener">at</a> CNBC&#8217;s&nbsp;CONVERGE LIVE&nbsp;event in Singapore.&nbsp;



Tsai told CNBC that AI could enhance the quality of work by taking care of tedious research-related tasks, enabling better recommendations from human minds instead of eliminating the analyst roles.



Tsai also said he expects AI to fundamentally change the practice of law. He expects AI to efficiently chart out a contract, enhancing lawyer judgment instead of eliminating it.



Also Read: <a target="_blank" href="https://www.benzinga.com/25/03/44254562/deepseek-stays-free-founder-rejects-monetization-plans-new-reasoning-model-amid-alibaba-talks" rel="noreferrer noopener">DeepSeek Wants To Stay Free As Of Now, Founder Rejects Monetization</a>



He told CNBC that AI&#8217;s total addressable market is at least $10 trillion, making it bigger than industries like transportation and healthcare insurance.



Tsai expects Alibaba to benefit from this upsurge of AI thanks to its cloud computing business.



Tsai told CNBC that Alibaba could also benefit significantly from AI within its own business.



<a target="_blank" href="https://www.benzinga.com/markets/emerging-markets/25/03/44229408/alibaba-unveils-new-ai-chip-to-power-chinas-open-source-tech-push-challenge-us-chip-giants" rel="noreferrer noopener">Recent reports indicated</a> Alibaba&#8217;s XuanTie C930 processor&#8217;s potential to broaden domestic use of open-source chips built on the&nbsp;RISC-V instruction set architecture. The new XuanTie processors designed for AI acceleration, automotive applications, and high-speed interconnection will ship to clients in March.



Last week, Alibaba also launched a&nbsp;new reasoning model&nbsp;comparable to DeepSeek&#8217;s R1.



Alibaba was among the first major global tech companies to&nbsp;open-source its large-scale AI models. Over the next three years, Alibaba&nbsp;committed $53 billion&nbsp;to&nbsp;cloud and AI infrastructure.



<h2 class="wp-block-heading">Alibaba Stock Prediction For 2025</h2>



Equity research analysts on and off Wall Street typically use earnings growth and fundamental research as a form of valuation and forecasting. But many in trading turn to technical analysis as a way to form predictive models for share price trajectory.



Some investors look to trends to help forecast where they believe a stock could trade at a certain point in the future. Looking at Alibaba, an investor could make an assessment about a stock's long term prospects using a moving average and trend line. If they believe a stock will remain above the moving average, which many believe is a bullish signal, they can extrapolate that trend into the future using a trend line. For Alibaba Gr Hldgs, the 200-day moving average sits at $91.41, according to <a href="https://pro.benzinga.com/">Benzinga Pro</a>, which is below the current price of $139.02. For more on charts and trend lines, <a href="https://pro.benzinga.com/">see a description here.</a>



Traders believe that when a stock is above its moving average, it is a generally bullish signal, and when it crosses below, it is a more negative signal. Investors could use trend lines to make an educated guess about where a stock could trade at a later date if conditions remain stable.



Price Action: BABA stock is down 0.35% at $138.54 premarket at last check Wednesday.



Also Read:



<ul>
<li><a href="https://www.benzinga.com/markets/eurozone/25/03/44253751/asml-boosts-ai-chip-rd-in-europe-amid-us-sanctions-china-slowdown-and-subsidy-uncertainty" target="_blank" rel="noreferrer noopener">ASML Boosts AI Chip R&amp;D In Europe Amid US Sanctions, China Slowdown, And Subsidy Uncertainty</a></li>
</ul>



Photo by Ascannio via Shutterstock

Media

BABA

Alibaba Chair Says AI Total Addressable Market Is $10 Trillion, Expects  Benefits Via Its Cloud Business

The&nbsp;25% tariffs on steel and&nbsp;aluminum imports imposed by U.S. President&nbsp;Donald Trump&nbsp;have now taken effect, triggering a swift retaliation from the European Union.



What Happened: The tariffs were enforced on Wednesday, impacting several countries including Canada, Australia, and the EU. The White House issued confirmation about the duties late Tuesday but also revealed that Trump had abandoned plans to increase tariffs on Canadian metals to 50%, <a href="https://www.cnbc.com/2025/03/12/trumps-25percent-tariffs-on-steel-and-aluminum-imports-take-effect.html">reported</a> CNBC.



In response, the European Union announced counter-tariffs on $28.33 billion&nbsp;worth of U.S. goods beginning in April. The European Commission stated that these measures aim&nbsp;to &#8220;protect European businesses, workers&nbsp;and consumers from the impact&nbsp;of these unjustified trade restrictions.&#8221;



Meanwhile, Australian Prime Minister&nbsp;Anthony Albanese&nbsp;criticized Trump&#8217;s move as &#8220;entirely unjustified,&#8221; adding that Australia will refrain from imposing reciprocal tariffs on U.S. imports to prevent price inflation for Australian consumers.



SEE ALSO: <a href="https://www.benzinga.com/trading-ideas/movers/25/03/44268979/melania-trumps-official-memecoin-worth-over-13-billion-barely-two-months-ago-is-now-valued-at-367-million">Melania Trump&#8217;s Official Memecoin, Worth Over $13 Billion Barely Two Months Ago, Is Now Valued At $367 Million</a>



Why It Matters: This development marks another chapter in the ongoing trade war, characterized by Trump&#8217;s bold tariff promises and subsequent reversals. The trade tensions have recently rattled markets, amid intensifying concerns that the tariffs could edge the world&#8217;s largest economy towards a recession.



Furthermore, Trump&#8217;s decision to <a href="https://www.benzinga.com/25/03/44267277/trump-scraps-50-tariff-hike-on-canadian-steel-aluminum-after-ontario-backs-down">scrap plans to hike </a>tariffs on Canadian metals to 50% came after Ontario paused&nbsp;a 25% tax on electricity&nbsp;exports to the U.S. This indicates a complex and rapidly evolving situation, with decisions being made and reversed in quick succession, adding to the uncertainty in global markets.



That being said, some of the domestic industry bodies hail the President&#8217;s move. American Iron and Steel Institute (AISI), representing U.S. steelmakers, supported the tariffs, stating they would generate jobs and strengthen domestic steel production, reported BBC. Furthermore, Jesse Gary, the CEO of Century Aluminum told the New York Times, "The new tariffs will close those loopholes back up and enable us to begin investing again, and bring on more production here in the U.S."



On the flipside, Bill Reinsch, a former Commerce Department official told BBC, &#8220;It protects [the steel and aluminium] industries but hurts downstream users of their products by making them more expensive.&#8221; 



The shares of domestic steelmakers, United States Steel Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/X#NYSE">X</a>) and Nucor Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NUE#NYSE">NUE</a>) climbed more than 13% year to date, as per<a href="http://pro.benzinga.com"> Benzinga Pro.</a> Meanwhile, Aluminum stocks Alcoa Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AA#NYSE">AA</a>) and Century Aluminum Co. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/CENX#NASDAQ">CENX</a>) closed the last session with gains of 3% and 9%, respectively.



<ul>
<li>READ MORE: <a href="https://www.benzinga.com/25/03/44268596/trumps-net-worth-plummets-by-nearly-300m-as-djt-stock-drops-to-its-lowest-since-october">Trump&#8217;s Net Worth Plummets By Nearly $300M As DJT Stock Drops To Its Lowest Since October</a></li>
</ul>



Image via Shutterstock



Disclaimer:&nbsp;This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Markets

CENX

Trump's 25% Tariffs On Steel And Aluminum Imports Take Effect, EU Retaliates: US Steel, Nucor, Century Aluminum And Other Domestic Stocks Cheer

Inflation eased in February, coming in lower than expected and reinforcing the Federal Reserve's path <a href="https://www.benzinga.com/topic/interest-rates">toward interest rate cuts.</a>



The headline Consumer Price Index fell from 3.0% year-over-year in January to 2.8% in February, according to a Bureau of Labor Statistics report released Wednesday. The reading was below economist expectations of 2.9%, as tracked by TradingEconomics, and marked the first decline after four straight months of rising price pressures.



On a monthly basis, CPI increased 0.2% in February, sharply moderating from 0.5% in January and below forecasts of 0.3%.



Core inflation, which excludes food and energy prices, slowed to 3.1% year-over-year, down from 3.3% in January and below forecasts of 3.2%. The monthly increase in core CPI was 0.2%, a cooldown from January's 0.4% pace and below estimates of 0.3%.



The shelter index climbed 0.3% in February, contributing nearly half of the overall monthly CPI increase. This rise was partially counterbalanced by a 4.0% drop in airline fares and a 1.0% decline in gasoline prices. 



Other categories that saw price increases included medical care, used cars and trucks, household furnishings and operations, recreation, apparel, and personal care. Among the few major indexes that declined in February were airline fares and new vehicles.



<h3 class="wp-block-heading">Fed's Outlook: A Step Closer To Rate Cuts</h3>



The softer-than-expected inflation data strengthens the argument for Federal Reserve rate cuts in 2025, as policymakers seek to balance economic risks.



U.S. economic growth is projected to slow sharply in the first quarter, with several investment banks revising GDP forecasts downward. The Atlanta Fed's GDPNow model estimates a potential 2.4% contraction, raising concerns about economic weakness.



With inflation easing and growth concerns mounting, the Fed may find more room to cut rates to support the economy. 



Prior to the report, money markets tracking Fed futures had priced in three to four rate cuts by year-end, according to the CME FedWatch Tool. The latest inflation data could further solidify that outlook.



<h3 class="wp-block-heading">Market Reactions</h3>



<ul>
<li>U.S. dollar: The dollar softened following the inflation report, with the U.S. dollar index, tracked by the Invesco DB USD Index Bullish Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UUP#NYSE">UUP</a>), slipping 0.1% as traders priced in a higher likelihood of rate cuts. </li>



<li>Treasury yields: The 10-year U.S. Treasury yield edged lower by 2 basis points to 4.26%.</li>



<li>Stock market: U.S. equity futures turned higher, with S&amp;P 500 futures up 1.4% in premarket trading at 8:35 a.m. ET. On Tuesday, the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) closed at $555.92, its lowest level in seven months and 3% below its 200-day moving average. Contracts on the tech-heavy Nasdaq 100 were 1.6% higher. </li>
</ul>



Read now: 



<ul>
<li><a href="https://www.benzinga.com/25/03/44270128/us-recession-probability-escalates-to-35-amid-tariffs-pimco-sounds-alarm">US Recession Risk Surges To 35%, Pimco Cautions On Economic Fallout From Trump&#8217;s Tariffs</a></li>
</ul>



Photo: Janews/Shutterstock

Inflation Cools More Than Expected In February, Strengthens The Case For Fed Rate Cuts

The chairperson of Alibaba Group Holding ADR (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BABA#NYSE">BABA</a>), Joseph Tsai acknowledged that everyone around the world is concerned about the ongoing tariff battle between the economic powerhouses of the world.



What Happened: While speaking at CNBC&#8217;s event Converge Live, in Singapore, Tsai responded to a question on tariff imposition by the Donald Trump administration and said that &#8220;Everyone is concerned about tariffs.&#8221;



He highlighted that the Chinese multinational technology company sells $50 billion worth of American products on its platform to Chinese consumers every year. On the other hand, about $30 billion worth of European products are also sold annually.



"I think the Trump administration will want to have more American companies doing business in China and making money there," he said, adding that it was ultimately between the global leaders to meet and decide on the future course of these protectionist policies.



Furthermore, he suggested if Trump&#8217;s wider tariff approach was just a bargaining chip, there was still a likelihood of seeing specific tariffs on Chinese electric vehicles. Tsai added that it could be a move to safeguard the American auto industry from potential competition.



See Also: <a href="https://www.benzinga.com/25/03/44269729/debt-over-equity-billionaire-howard-marks-endorses-credit-investments-amid-shifting-investor-focus-and-market-correction">Billionaire Howard Marks Prefers Credit Over Equity Amid Falling Market: &#8216;Yields Implies Higher Returns From Credit Than The S&amp;P 500&#8217;</a>



Why It Matters: On Tuesday afternoon, President Trump unexpectedly reversed his decision to double tariffs on Canadian steel and aluminum to 50%, just hours after announcing the increase. The abrupt policy change, which rattled financial markets, followed Canada&#8217;s withdrawal of plans for a 25% surcharge on electricity.



Additionally, as Trump&#8217;s tariffs on steel and aluminum imports go into effect, the European Union announced on Wednesday that it will retaliate by imposing levies of 26 billion euros or $28.33 billion on U.S. goods beginning in April.



Price Action: The SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) and Invesco QQQ Trust ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>), which track the S&amp;P 500 index and Nasdaq 100 index, respectively, rose in premarket on Wednesday. The SPY was up 0.73% to $560.00, and the QQQ also advanced 0.83% to $475.51, according to <a href="https://pro.benzinga.com/dashboard">Benzinga Pro</a> data.



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Alibaba's Joseph Tsai Says 'Everyone Is Concerned About Tariffs,' As He Expects Levies On Chinese EVs

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