NVIDIA and AMD Lead, Bitcoin Shows Decline in the Market
The US dollar posted a moderate recovery against most major currencies on Wednesday, with the USDX up by around 0.2% on the iFOREX platform. While February's consumer price index showed lower-than-expected inflation, certain components indicated persistent inflationary pressures. Simultaneously, some support in the dollar could derive from rising Treasury yields, reflecting trader concerns about a potential U.S. recession and the impact of President Trump's trade tariffs.
Despite a Wall Street rebound and softer-than-expected US inflation data that initially boosted Bitcoin and the broader crypto market, gains remained limited. Ongoing concerns about a potential recession and escalating trade tensions continued to weigh on risk appetite, preventing a significant recovery. This followed a recent drop below $80,000 for Bitcoin due to widespread risk aversion.
On the energy front, the two main benchmarks WTI and Brent rose by 1.5% and 1.42% respectively, recovering from multi-year lows, driven by positive factors including lower-than-expected US inflation numbers, a depreciating dollar, and a significant drop in US gasoline stockpiles, which eased worries about demand.
U.S. stock indices displayed positive performance on Wednesday, recovering losses seen earlier this week driven by tech gains. NVIDIA Corporation was leading to the upside with a 6.51% rally as investors bought the recent dip in the sector. Easing inflation data improved market sentiment towards risk assets, alleviating concerns about stagflation. February's U.S. consumer price increase was less than expected, a key factor for Federal Reserve officials concerned about President Trump's policy impact on inflation. Additionally, TSMC proposed a joint venture to Nvidia, AMD, Broadcom, and Qualcomm to manage Intel's U.S. foundry business, as reported by Reuters.
The market's focus is now on the upcoming PPI data, as it will provide critical insights into inflation trends and the Federal Reserve's potential response. According to reports, concerns persist that tariffs could possibly maintain inflationary pressures, delaying further interest rate reductions. Some price action could also be observed upon the release of weekly jobless claims numbers from the U.S. and a report on natural gas stocks in underground storage from the Energy Information Administration. Later this week the focus will be on the release of the preliminary consumer sentiment and inflation expectations reports.
EUR/USD
EUR/USD eased lower on Wednesday, retreating by approximately 0.3% as bullish momentum faded, pushing bids back below the key 1.0900 level.
European economic data has taken a backseat this week, with investor focus shifting to US inflation figures and escalating trade tensions. US inflation data showed a sharper-than-expected decline in February, with the Consumer Price Index (CPI) rising 0.2% month-over-month and 2.8% year-over-year, slightly surpassing forecasts. The CME FedWatch Tool now suggests a higher probability of a rate cut in June, shifting expectations forward from July.
Later in the session, market attention will turn to the release of February’s Producer Price Index (PPI), a key measure of wholesale inflation, as part of the US economic docket. Investors will analyze the data for further insights into inflationary pressures and potential implications for Federal Reserve policy.
Gold
Gold prices advanced on Wednesday, showing resilience despite elevated US Treasury yields and a stronger US Dollar.
The US Bureau of Labor Statistics (BLS) reported a slight decline in consumer inflation for February. However, investor sentiment remains cautious, as aggressive tariffs on US imports could reignite inflationary pressures.
On Wednesday, the US imposed 25% tariffs on steel and aluminium imports as former President Donald Trump intensified efforts to reduce the trade deficit through protectionist measures. Despite geopolitical developments, including signs of progress in peace talks between Ukraine and Russia, gold remains on an upward trajectory.
WTI Oil
Oil prices climbed on Wednesday as US government data revealed lower-than-expected oil and fuel inventories, fueling optimism about demand. However, concerns over a potential US economic slowdown and the broader impact of tariffs on global growth kept investors cautious.
US crude stockpiles increased by 1.4 million barrels last week, below the 2-million-barrel rise forecasted. Meanwhile, gasoline inventories plunged by 5.7 million barrels—far exceeding expectations of a 1.9-million-barrel draw—while distillate stocks also declined more than anticipated.
Despite ongoing market volatility, the Organization of the Petroleum Exporting Countries (OPEC) reaffirmed its forecast for robust global oil demand growth in 2025, citing support from air and road travel.
US 500
The US 500 rose on Wednesday, driven by a strong rebound in tech stocks following softer-than-expected inflation data, which helped offset lingering concerns over escalating tariffs.
Technology stocks led the rally, with NVIDIA Corporation soaring more than 6% as investors seized the opportunity to buy the recent dip in the sector.
Data from the US Labor Department showed that consumer prices in February rose at a slower pace than anticipated development likely to be closely scrutinized by Federal Reserve officials.
Meanwhile, the US expanded its tariffs on steel and aluminum, with new duties taking effect on Wednesday as former President Donald Trump ramped up efforts to reshape trade relationships. In response, the European Commission announced a two-part countermeasure plan.
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