The CNN Money Fear and Greed index showed some improvement in the overall market sentiment, but the index remained in the “Extreme Fear” zone on Wednesday.

U.S. stocks settled mixed on Wednesday, with the Nasdaq Composite gaining more than 1% during the session following the release of inflation data.

In February, the Consumer Price Index declined from 3% year-over-year to 2.8%, beating analysts’ expectations of a slowdown to 2.9%. Core inflation also dropped more than anticipated, easing from 3.3% to 3.1%.

The U.S. imposed 25% tariffs on steel and aluminum in April, prompting swift retaliation. In response, the EU introduced tariffs on €26 billion worth of U.S. goods, while Canada imposed additional levies on $29.8 billion, supplementing previous penalties.

Nvidia Corp. (NASDAQ:NVDA) shares gained around 6.4%, while Tesla Inc. (NASDAQ:TSLA) added over 7% on Wednesday.

Most sectors on the S&P 500 closed on a positive note, with consumer discretionary, information technology and communication services stocks recording the biggest gains on Wednesday. However, consumer staples and health care stocks bucked the overall market trend, closing the session lower.

The Dow Jones closed lower by around 83 points to 41,350.93 on Wednesday. The S&P 500 rose 0.49% to 5,599.30, while the Nasdaq Composite climbed 1.22% at 17,648.45 during Wednesday's session.

Investors are awaiting earnings results from Dollar General Corp. (NYSE:DG), Ulta Beauty Inc. (NASDAQ:ULTA) and G-III Apparel Group Ltd. (NASDAQ:GIII) today.

At a current reading of 20.4, the index remained in the “Extreme Fear” zone on Wednesday, versus a prior reading of 17.8.

What is CNN Business Fear & Greed Index?

The Fear & Greed Index is a measure of the current market sentiment. It is based on the premise that higher fear exerts pressure on stock prices, while higher greed has the opposite effect. The index is calculated based on seven equal-weighted indicators. The index ranges from 0 to 100, where 0 represents maximum fear and 100 signals maximum greediness.

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