Consumer prices rose 2.8% in February compared to a year ago, easing slightly over the first full month under President Donald Trump and offering welcome news for markets roiled by a global trade war. Inflation cooled more than economists expected.

Price increases slowed from a 3% inflation rate recorded in January, though inflation remain nearly a percentage point higher than the Federal Reserve’s target of 2%.

Egg prices, a closely watched symbol of price increases, soared 58% in February compared to a year ago, accelerating from the previous month. Bird flu has decimated the egg supply, lifting prices higher.

The Justice Department opened an investigation into egg producers to learn if market practices have contributed to the price hikes, a source familiar with the matter told ABC News.

The inflation report arrived hours after the U.S. imposed 25% tariffs on steel and aluminum, prompting near-immediate retaliatory duties from the European Union and marking the latest escalation of trade tensions.

Tariffs are widely expected to raise prices for consumers, since importers typically pass along a share of the added cost to shoppers.

The stock market has plunged since Trump imposed tariffs on Mexico, Canada and China last week, giving rise to warnings on Wall Street about a potential economic downturn. Within days, Trump delayed some of the tariffs on Canada and Mexico.

The report on Wednesday may soften pressure on the Federal Reserve, which bears responsibility for keeping inflation under control.

Federal Reserve Chair Jerome Powell last week said the administration’s tariff plan would likely raise prices for U.S. shoppers and retailers

The scale and duration of the tariffs remain unclear, but a portion of the taxes on imports will probably reach consumers, Powell told an economic forum in New York City last week.

“We’re at a stage where we’re still very uncertain about what will be tariffed, for how long, at what level,” Powell said. “But the likelihood is some of that will find its way. It will hit the exporters, the importers, the retailers and to some extent consumers.”

On multiple occasions in recent days, the White House declined to rule out a possible recession, saying the tariffs would require a “period of transition.”

A solid, albeit disappointing jobs report on Friday exacerbated concerns among some observers.

Employers hired 151,000 workers last month, falling short of expectations of 170,000 jobs added. The unemployment rate ticked up to 4.1%, which remains a historically low figure.

The Trump administration slapped 25% tariffs on goods from Mexico and Canada, as well as 10% tariffs on imports from China. The fresh round of duties on Chinese goods doubled an initial set of tariffs placed on China last month.

A day later, Trump issued a one-month delay for tariffs on auto-related goods from Mexico and Canada. The carve-out expanded soon afterward with an additional one-month pause for goods from Mexico and Canada compliant with the United States-Mexico-Canada Agreement, or USMCA, a free trade agreement.

On Tuesday, Trump announced plans to add another 25% tariff on Canadian steel and aluminum, bringing the total to 50%. The move came in response to threats made by Ontario to cut off electricity to parts of the U.S., Trump said.

Hours later, Ontario Premier Doug Ford issued a joint statement with U.S. Commerce Secretary Howard Lutnick on X announcing the suspension of the 25% surcharge on electricity sent to the U.S.

The tariffs slapped on Canada, Mexico and China are widely expected to increase prices paid by U.S. shoppers, since importers typically pass along a share of the cost of those higher taxes to consumers.

A key gauge of consumer confidence registered its largest monthly drop since August 2021, the nonpartisan Conference Board said in February.

The share of consumers who expect a recession within the next year surged to a nine-month high, the data showed. A growing portion of consumers believe the job market will worsen, the stock market will fall and interest rates will rise, the report added.

ABC News’ Katherine Faulders and Soo Youn contributed to this report.