US Stocks Mixed Amidst Tariff Shifts and Inflation Data Outlook

Wall Street witnessed a mixed performance Tuesday as investors weighed the implications of President Donald Trump's evolving tariff policies and anticipated upcoming inflation data.

The Dow Jones Industrial Average (DJI) edged up 0.3%, while the S&P 500 (GSPC) traded marginally above the flatline. The Nasdaq Composite (IXIC) experienced a modest 0.4% decline.

Cautious Market Sentiment Amidst Tariff Anxiety

A cautious market sentiment lingered as investors awaited Trump's announcement of a universal tariff plan, expected to be revealed midweek. On Monday, the President imposed 25% duties on steel and aluminum imports, putting pressure on major trading partners Canada and Mexico.

Inflation Data in Focus

Attention also shifted to January's Consumer Price Index (CPI) and its wholesale counterpart, due for release Wednesday and Thursday, respectively. Economists anticipate a 2.9% headline inflation rate, mirroring December's annual gain. Core inflation, excluding volatile items like food and gas, is projected to rise 3.1%, the lowest level since April 2021.

Federal Reserve Testimony

Federal Reserve Chair Jerome Powell's two-day testimony before Congress commenced Tuesday. Powell reiterated the Fed's stance of not rushing to adjust interest rates and emphasized the importance of central bank independence.

Powell on Housing, Stablecoins, and Trade Policy

Regarding housing, Powell expressed that prices are likely to remain elevated despite potential declines in mortgage rates. Additionally, he stated that stablecoins would be subject to a regulatory framework and highlighted the potential benefits and risks associated with their development. On trade policy, Powell maintained that it was not the Fed's responsibility to comment on tariff matters and that they would continue to respond to their implementation.

Corporate News

In corporate news, Super Micro Computer (SMCI) shares fell ahead of earnings, while Intel (INTC) stock jumped on news of an upcoming announcement by Vice President JD Vance on ensuring domestic production of AI chips.

Conclusion

US stock markets exhibited a mixed performance Tuesday, influenced by tariff uncertainties and upcoming inflation data. The market remains cautious as investors assess the potential impacts of Trump's policies and seek guidance from the Fed's testimony.