Escalating Trade Tensions and Slower Progress On Inflation Weighs On Wall Street

Barry Adams
12 Mar, 2025
New York City

Wall Street indexes lacked direction and struggled to hold on to early gains amid escalating trade tensions between the U.S. and key trading partners.

The S&P 500 index hovered near the flat line, and the Nasdaq Composite advanced more than 0.5% after Canada and the European Union imposed retaliatory tariffs on U.S. exports.

Benchmark indexes have been under pressure as investors fear that escalating tariffs could trigger a U.S. recession following the chaotic trade policies of the Trump administration.

Over the last three weeks, the S&P 500 index and the Nasdaq Composite have lost nearly 10%, erasing market capitalization by $4 trillion after the Trump administration launched a global tariff war targeting key trade partners.

Investors are worried that the prospects of higher inflation driven by tariffs may force the Federal Reserve to delay its future rate cuts.

On the economic front, the consumer price inflation in February eased to 2.8% from 3% in January, the U.S. Bureau of Labor Statistics reported Wednesday. 

The easing of inflation was partly driven by a sharp fall in gasoline prices, but shelter inflation inched down a little to 4.2% from 4.4%, and food price inflation accelerated to 2.6% from 2.5%.

Core inflation, which excludes volatile food and energy prices, slowed to 3.1% from 3.3% and dropped to the lowest level since April 2021.

 

Commodities, Currencies, Indexes, Yields

The S&P 500 index increased 1% to 5,571.69, the Nasdaq Composite edged up 0.6% to 17,533.54, and the Russell 2000 index fell 0.5% to 2,015.59.

The yield on 2-year Treasury notes edged higher to 4.00%, 10-year Treasury notes increased to 4.32%, and 30-year Treasury bonds advanced to 4.63%.

WTI crude oil increased $1.13 to $67.38 a barrel, and natural gas prices edged lower by $0.24 to $4.21 a thermal unit.

Gold decreased by $3.08 to 2,910.52 an ounce, and silver edged up by $0.18 to $33.03.

The dollar index, which weighs the US currency against a basket of foreign currencies, decreased 0.17 to 103.67 and traded at a two-year high.

 

U.S. Stock Movers

Casey's General Stores jumped 6% to $401.14 after the convenience store retailer reported higher sales and earnings in the latest quarter. 

Inside same-store sales increased 3.7% compared to the prior year and 8.0% on a two-year stack basis, with an inside margin of 40.9%.

Same-store fuel gallons were up 1.8% from a year ago, with a fuel margin of 36.4 cents per gallon.

Same-store operating expenses excluding credit card fees were up 3.2%, favorably impacted by a 2% reduction in same-store labor hours.

For fiscal 2025, the company expects same-store sales to increase between 3% and 5% with the inside margin to be comparable to the prior year.

The company expects to add approximately 270 stores for the year.

Same-store fuel gallons sold is expected to be negative 1% to positive 1%.

Groupon Inc. soared 32% to $12.93, and the online marketplace operator estimated higher-than-expected annual revenue range between $493 million and $500 million. 

The company said it returned to positive free cash flow in 2024, and adjusted earnings in the fiscal fourth quarter surpassed market expectations.