Bitcoin and US stocks climb as CPI inflation cools in February

Bitcoin and U.S. stocks increased in value on Wednesday after the Consumer Price Index inflation rate for February came in lower than expected — providing a boost to risk assets amid ongoing economic uncertainty.

The CPI rose 0.2% in February on a seasonally adjusted basis, bringing the annual inflation rate to 2.8%, according to the U.S. Bureau of Labor Statistics. This figure was below economists’ projections of 2.9% and marked a decline from January’s 0.5% monthly increase. Core CPI, which excludes volatile food and energy prices, also rose 0.2% month-over-month and 3.1% on an annual basis, both slightly below estimates of 0.3% and 3.2%, respectively.

The softer-than-expected inflation data has fueled optimism that the Federal Reserve could pivot toward interest rate cuts sooner rather than later — bolstering both cryptocurrencies and traditional markets.

Bitcoin rallies while the stock market extends gains

Bitcoin jumped nearly 4% over the past 24 hours, trading around $83,400 as of Wednesday morning, according to The Block's Price Page. The rally follows a broader rebound across risk assets as investors digest the possibility of monetary easing.

“Today’s data adds to the case for rate cuts, and risk assets are rallying in response,” 21Shares Crypto Research Strategist Matt Mena said. “Bitcoin has rebounded, retesting $85,000, while index futures push higher. This dynamic suggests that if rate cuts materialize this year, it could unleash a flood of liquidity, propelling equities and crypto higher.”

Mena added that bitcoin appears to be on the verge of breaking out of its stubborn sub-$90,000 range, with the potential to test $95,000 resistance before making a run toward the highly anticipated $100,000 mark.

US stock market climbs after inflation report

U.S. equities rallied alongside bitcoin, with all three major indexes posting strong gains early Wednesday. The Dow Jones Industrial Average climbed 274 points, or 0.7%, to around 41,707 as of 9:30 a.m. ET. The S&P 500 rose 1.2% to approximately 5,640, while the Nasdaq Composite surged 1.8% to trade near 17,752. Nvidia shares gained more than 6%, while Meta Platforms and Tesla rose 4% and 8%, respectively, in early trading.

Tuesday’s market session had been volatile following President Donald Trump’s announcement of higher tariffs on Canadian aluminum and steel, which he later reversed. All three major indexes had closed lower the previous day.

Wall Street’s fear gauge, the Cboe Volatility Index (VIX), fell about 5% to 25, reflecting easing investor concerns. Meanwhile, Treasury yields moved higher, with the benchmark 10-year yield settling above 4.28% on Tuesday.