Market Beats | US Inflation Eases Amid Drop in Car and Gas Price; Canada Imposes New US Tariffs in Retaliation; Alphabet Close to Acquiring Eye-Tracking Startup; Google Debuts AI Models for Robot Training; STF Founder to Submit Bid for Boston Celtics; US Budget Deficit Hits Record in February

—— US Inflation Eases Amid Drop in Car and Gas Price; Canada Imposes New US Tariffs in Retaliation; Alphabet Close to Acquiring Eye-Tracking Startup; Google Debuts AI Models for Robot Training; STF Founder to Submit Bid for Boston Celtics; US Budget Deficit Hits Record in February

1. US Inflation Eases Amid Drop in Car and Gas Price

US consumer prices advanced at the slowest rate in four months in February, a bit of welcome news for American households still wary of tariff-induced price hikes.

According to Bureau of Labor Statistics data released on Wednesday, the consumer price index inched up by 0.2% in February, following a sharper 0.5% increase in January. The core CPI—which strips out the typically volatile food and energy categories—also rose by 0.2%.

This modest slowdown, helped by lower prices for cars and gasoline, might not last long. Economists predict that a worsening trade war could eventually push up prices on a wide range of products, from food to clothing, putting further strain on consumers and the overall economy.

Despite the encouraging numbers, Nationwide’s chief economist, Kathy Bostjancic, cautioned that the positive report is “old news.” “There’s no disinflation momentum right now,” she said. “We are predicting a little bit of a bump up in the coming months because of these tariffs.”

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2. Canada Imposes New US Tariffs in Retaliation

Canada has introduced new 25% counter-tariffs on roughly C$30 billion (around $20.8 billion) of American-made products following the Trump administration’s global tariffs on steel and aluminum imports.

These retaliatory tariffs will hit US-made steel and aluminum products, as well as consumer items like computers and sporting goods. They are set to match the US tariffs on a dollar-for-dollar basis and will come into effect at 12:01 a.m. New York time on Thursday, according to Canadian Finance Minister Dominic LeBlanc.

Overall, the Canadian measures will cover C$12.6 billion in steel products, C$3 billion in aluminum, and C$14.2 billion in other goods.

Canadian Foreign Minister Melanie Joly condemned the US tariffs as “unjustified and unjustifiable” and stated that she plans to discuss the issue with US Secretary of State Marco Rubio during the Group of Seven foreign ministers meeting, which Canada is hosting over the next three days in a rural area of Quebec.

In a similar move, the European Union has announced its own set of tariffs, targeting up to €26 billion (approximately $28.3 billion) of American goods in response to Trump’s metal tariffs.

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3. Alphabet Close to Acquiring Eye-Tracking Startup

Alphabet Inc.’s Google is nearing a deal to acquire AdHawk Microsystems Inc., a Canadian firm specializing in eye-tracking technology, as part of its renewed focus on headsets and smart glasses.

According to sources familiar with the matter, the proposed acquisition is valued at $115 million, which includes an additional $15 million in future payments contingent on AdHawk meeting specific performance targets. The agreement is expected to close this week, although there remains a risk that negotiations could collapse at this final stage since the deal has not yet been signed. Google declined to comment, and AdHawk did not respond to inquiries.

Founded in 2017 and based in Waterloo, Ontario, AdHawk Microsystems has developed innovative chips, hardware, and software that enable advanced eye-tracking. The company’s flagship product, a pair of glasses known as MindLink, is designed to help manufacturers integrate gaze-tracking technology into devices by accurately determining where a user is looking.

AdHawk’s competitive advantage lies in its low-power components, which can process corneal and pupil data more quickly than rival sensors.

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4. Google Debuts AI Models for Robot Training

Alphabet Inc.’s AI lab is set to unveil two new robotics models designed to help developers train robots for unpredictable scenarios—a long-standing hurdle in the field.

Google DeepMind announced on Tuesday that it will introduce Gemini Robotics, an offshoot of its flagship AI model tailored to create robots that are more agile and interactive. The lab is also launching Gemini Robotics-ER, a model that specializes in spatial understanding, equipping robot manufacturers with enhanced reasoning capabilities to develop new programs.

DeepMind engineer Kanishka Rao explained in a media briefing that by integrating Gemini into robotic systems, Google is moving closer to realizing “general purpose robotics” capable of handling a wide range of tasks. “Our worlds are super messy and dynamic and rich, and I think a general-purpose intelligent robot needs to be able to deal with that messiness,” he said.

This push underscores a renewed interest in robotics across Silicon Valley. With companies like Meta Platforms Inc., Tesla Inc., and OpenAI stepping up their robotics efforts—and startups securing funding at high valuations—the dream of building robots that can perform at human levels is once again gaining traction.

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5. STF Founder to Submit Bid for Boston Celtics

A consortium that includes Bill Chisholm, co-founder of STG Partners, has reportedly emerged as a bidder for the NBA’s Boston Celtics, according to sources familiar with the matter. The group is reportedly working in collaboration with Goldman Sachs Group Inc. on the deal. Chisholm, who serves as managing partner and chief investment officer at STG—a private equity firm focused on software and other technology sectors—helped close the firm’s seventh and largest fund in 2023, raising $4.2 billion.

Neither Chisholm, STG representatives, nor Celtics spokespeople have immediately commented on the bid, and a Goldman Sachs representative declined to comment as well. Other consortium members have not been identified.

The Celtics’ ownership group, Boston Basketball Partners, decided last year to sell the storied franchise and is now fielding offers for a majority stake. Sportico has valued the reigning NBA champions at more than $5 billion.

The current owners, led by Wyc Grousbeck and including Stephen Pagliuca, purchased the team for $360 million in 2002 and have seen the team’s value soar in recent years.

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6. US Budget Deficit Hits Record in February

The US budget deficit continued to expand in February, reaching $1.15 trillion over the first five months of the fiscal year. Rising Medicare costs and higher expenses for servicing government debt have been key contributors to this increase.

In February alone, the deficit grew by $307 billion, according to a Treasury Department release on Wednesday. When adjusted for calendar differences, the current fiscal year’s gap is 17% larger than that of the previous year.

This persistent widening could complicate President Donald Trump’s plans to extend and build upon his 2017 tax-cut package—most of which is due to expire at the end of this year. Some congressional fiscal conservatives may push for additional measures to prevent further deterioration of the fiscal outlook, while tax-cut advocates warn that failing to extend the cuts could harm economic growth.

When asked whether the Elon Musk-led initiative to cut federal spending was impacting the budget numbers, an agency official directed reporters to DOGE and noted that few spending categories registered significant declines in the report.

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7. US Stocks Tank Amid Tariffs

U.S. stocks faced a downturn on Friday afternoon, closing in negative territory as the automotive and Chinese sectors led the fall. This decline was primarily driven by an announcement from the White House confirming President Donald Trump’s intention to proceed with significant tariffs on imports from Mexico, Canada, and China starting Saturday.

Specifically, Trump’s administration plans to impose a 25% tariff on goods from Mexico and Canada, and a 10% tariff on Chinese imports. This news negatively impacted investor sentiment, particularly affecting a UBS Group AG basket of stocks deemed at risk from these tariffs, which plunged by 3.7%. Additionally, despite an initial gain, the S&P 500 Index ended the day down by 0.5%.

The financial markets reacted swiftly, with the Bloomberg Dollar Spot Index reaching a session high, indicating a flight to safety among investors. Meanwhile, the Cboe Volatility Index (VIX), often referred to as the “fear gauge,” increased to just over 16, reflecting growing uncertainty and risk aversion among traders.

The ongoing threat of tariffs has been a significant concern for U.S. equity markets since Trump’s election victory in November. Analysts and strategists have cautioned that such high levies could spark inflationary pressures, potentially leading to broader economic disruptions and negatively impacting stock valuations.

Given this backdrop, sectors such as automotive, technology, and manufacturing, which have substantial exposure to international trade, are particularly vulnerable to the effects of prolonged trade wars and the imposition of tariffs.

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