Stock market news live updates: Stocks rise, Treasury yields steady after muted inflation data - Yahoo Finance

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Stocks rose on Wednesday after new data showed still-muted inflationary pressures in consumer goods, helping assuage fears of a rapid jump in prices during the economic recovery. Treasury yields reversed course to dip following the report. 

The Nasdaq gained another more than 1%, after the index closed Tuesday's session higher by 3.7% to post its best day since November. The S&P 500 added 0.6%, also extending gains from earlier this week. 

The turn higher in stocks came after the Labor Department's Consumer Price Index (CPI) on Tuesday showed core consumer prices increased less than expected in February. Excluding volatile food and energy prices, prices paid by consumers rose only 1.3% in February over last year, coming in below the 1.4% increase expected and slowing from the prior month. 

The report underscored that underlying inflation trends in the economy were remaining muted even as economic activity and mobility began picking up, suggesting the Federal Reserve could in turn maintain its easy monetary policy posturing and avoid raising interest rates in the near-term to stave off fast-rising inflation. 

The Dow ended only a tick above the flat line on Tuesday and looked set to lag the Nasdaq again on Wednesday. However, these modest moves higher belied weeks of outperformance amid a broad-based rotation into cyclical and value stocks and away from growth and technology names.

The factors setting off the rotation – namely, the quick ramp higher in Treasury yields and concerns of inflation and higher rates weighing on growth stocks especially – still remain a focal point for investors, however. The benchmark 10-year Treasury yield steadied on Wednesday, but is still around 50 basis points above levels from last month. 

Other strategists agreed that jitters over inflation and rising rates would likely remain a central theme for investors this year.

"There’s the irony that in year one of a market recovery everybody doubts it and says how can this be happening if the economy isn’t good, and then in year two everybody struggles to assess whether [the economy has] just gotten too good too fast and it’s too hot,” Brian Levitt, global market strategist at Invesco, told Yahoo Finance on Tuesday. “And so the last few days have been the latter story: Markets being disrupted by concerns of inflation and higher rates and premature Fed tightening. And today’s a little bit of a reprieve on that story as rates come down a bit and investors can start thinking about longer-duration assets again.”

"It’s going to be a debate all year, this idea of inflation and higher rates and Fed tightening," he added. "And that could put some challenges into the market, particularly longer-duration assets. But ultimately I wouldn’t sleep on growth stocks and I expect the structural growth companies to continue to be the long-term winners here."

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9:30 a.m. ET: Stocks open higher after inflation data comes in below estimates 

Here's where markets were trading after the opening bell on Wednesday: 

• S&P 500 (^GSPC): +27.11 (+0.7%) to 3,902.55

• Dow (^DJI): +170.84 (+0.54%) to 32,003.54

• Nasdaq (^IXIC): +160.09 (+1.22%) to 13,235.78

• Crude (CL=F): +$0.72 (+1.12%) to $64.71 a barrel

• Gold (GC=F): +$35.40 (+2.11%) to $1,713.40 per ounce

• 10-year Treasury (^TNX): -0.4 bps to yield 1.54%

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8:30 a.m. ET: Core consumer prices rose just 1.3% in February, coming in below expectations

Consumer prices increased by 0.4% month-over-month in February, accelerating from a 0.3% gain in January and rising for a ninth consecutive month, the Bureau of Labor Statistics (BLS) said Wednesday. The increase matched consensus expectations, based on Bloomberg-compiled data, and suggested inflationary pressures at the consumer level remained tepid at the beginning of the year. 

Much of the gain in the CPI in February came from a rise in energy prices, which increased 3.9% month-over-month. Fuel oil prices in turn jumped 9.9%, as oil and other energy prices rebounded from a pandemic-induced slump in 2020. A 6.4% increase in gasoline prices accounted for more than half of the increase in the CPI, the BLS said. 

Indexes tracking the prices of shelter, recreation, medical care and motor vehicle insurance each increased in February over January, while indexes for airline fare, used cars and apparel declined. 

Year-over-year, the Consumer Price Index (CPI) increased by 1.7% in February, also matching expectations and marking the fastest gain since February 2020. Excluding more volatile food and energy prices, the CPI rose 1.3% year-over-year, coming in slightly below the 1.4% rise expected. 

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7:20 a.m. ET Wednesday: Stock futures mixed as Nasdaq looks to fall anew

Here's where markets were trading ahead of the opening bell Wednesday morning:

• S&P 500 futures (ES=F): 3,871.25, down 2 points or 0.05%

• Dow futures (YM=F): 31,881.00, up 70 points or 0.22%

• Nasdaq futures (NQ=F): 12,749.25, down 39.5 points or 0.31%

• Crude (CL=F): +$0.24 (+0.37%) to $64.25 a barrel

• Gold (GC=F): -$8.10 (-0.47%) to $1,708.80 per ounce

• 10-year Treasury (^TNX): +1.2 bps to yield 1.556%

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6:04 p.m. ET Tuesday: Stock futures tick up

Here were the main moves in markets as of 6:04 p.m. ET:

• S&P 500 futures (ES=F): 3,877.00, up 3.75 points or 0.1%

• Dow futures (YM=F): 31,857.00, up 46 points or 0.14%

• Nasdaq futures (NQ=F): 12,802.00, up 13.25 points or 0.1%

NEW YORK, NEW YORK - MARCH 09: The New York Stock Exchange (NYSE) stands in lower Manhattan on March 09, 2021 in New York City. The Dow Jones Industrial Average rallied more than 300 points Tuesday as tech stocks surged and optimism over the recently passed Covid relief bill cheered investors. (Photo by Spencer Platt/Getty Images)

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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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