Stock Market Surges After Inflation Numbers Come in Lower Than Anticipated
The three major U.S. stock market indexes shot up Wednesday on news that inflation cooled during President Donald Trump’s first full month in office.
The Wall Street Journal reported that the consumer-price index rose 2.8 percent in February compared to the same month last year, just 0.2 percent from January.
Economists anticipated a 2.9 percent rise in February from last year and a 0.3 percent increase compared to January.
The last four months of former President Joe Biden’s administration had seen inflation rising.
The inflation rate is down to 2.8%!
The Trump Effect! 🔥 pic.twitter.com/znZNNnkgSX
— GOP (@GOP) March 12, 2025
If inflation had increased year-over-year in February, it would have made it “harder for the Federal Reserve to further cut interest rates, even if the economy is slowing,” the outlet noted.
🚨 CNN ON TRUMP’S FIRST FULL INFLATION REPORT: We’ve got some good news on the economy, the #1 issue for many Americans: the cost of living… consumer prices increased 2.8% over the year, a step in the right direction, better than expected. This is very encouraging. pic.twitter.com/i4AbVmcGgV
— Eric Daugherty (@EricLDaugh) March 12, 2025
Lower interest rates generally make investing in the stock market more appealing.
Fox Business reported the Dow Jones Industrial Average shot up over 500 points (1.28 percent), and the Nasdaq and S&P 500 were up 1.97 percent and 1.71 percent, respectively, following the good inflation news.
WATCH: “Big rally underway right now” reports Fox’s @MariaBartiromo as markets welcome new Consumer Price Index (CPI) data, which came in slightly below expectations.
Inflation rose by 0.2% month-over-month, compared to the forecasted 0.3%. The annual inflation rate reached 2.8%… pic.twitter.com/CLz7jx9odT
— TV News Now (@TVNewsNow) March 12, 2025
FBN noted that gasoline, car prices, and airline fares were all down compared to January.
On his first day in office, Trump began implementing his campaign promise to “Drill, baby, drill” by signing an executive order titled “Unleashing American Energy.” The Republican had stated many times during the campaign that a prime cause of inflation was increased gasoline prices under Biden.
Trump’s EO reversed Biden’s “green” policies that greatly restricted oil and natural gas exploration on federal lands and offshore.
The president noted at the White House Wednesday that oil was dropping faster than he anticipated and “when energy comes down, prices [overall] are going to be coming down with it.”
.@POTUS: Oil prices are falling faster than I expected — and “when energy comes down, prices are going to be coming down.” pic.twitter.com/PzHOAcnXJw
— Rapid Response 47 (@RapidResponse47) March 12, 2025
The president reacted to the falling prices while greeting Prime Minister Micheal Martin of Ireland on Wednesday, saying, “Very good news!”
Trump welcomes the Irish PM to the White House and reacts to his first inflation numbers of the 47th administration:
“Very good news!”
Inflation beat expectations and cooled in February, reversing four straight months of rising prices under Biden. pic.twitter.com/Nsmwi3hqCw
— johnny maga (@_johnnymaga) March 12, 2025
Investopedia reported that Wednesday’s stock market surge came after indexes had fallen sharply over the previous two days, following their worst week of the year last week.
By later in the day Wednesday, the markets had given back some of their gains based on uncertainties created as Trump seeks to rebalance trade and spur domestic production of goods by using tariffs.
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