US Stocks Rise on Mixed Earnings and Trump Tariffs
US stocks gained ground on Thursday afternoon as investors weighed megacap tech earnings and awaited Apple's results for further insights on Big Tech's prospects. The S&P 500 (^GSPC) climbed 0.5%, while the Dow Jones Industrial Average (^DJI) rose 0.4%. The tech-heavy Nasdaq Composite (^IXIC) gained nearly 0.3%.
Tech Earnings in Focus
Tesla's (TSLA) shares ticked higher despite missing earnings estimates, with investors reassured by the company's vow to return to growth in 2025. Meta's (META) quarterly earnings beat helped lift its shares, while Microsoft's stock slumped 6% after its cloud revenue fell short.
Trump's Tariff Threats
Ahead of the closing bell, President Donald Trump once again threatened 25% tariffs on Mexico and Canada. The US dollar (DX=F) index spiked on the news, reversing earlier losses to close near flat.
Economic Data and Fed Outlook
The Bureau of Economic Analysis's advance estimate of fourth-quarter gross domestic product (GDP) showed the US economy grew at an annualized pace of 2.3%, below the 2.6% expected by economists. Meanwhile, investors turned their attention to earnings reports as the Federal Reserve stood pat on interest rates.
Biden's GDP Speech
Following the release of GDP data, President Biden delivered a speech addressing the economy and inflation. He vowed to continue investing in infrastructure and clean energy while urging Congress to pass his Build Back Better agenda.
Corporate Updates
American Airlines (AAL) CEO expressed condolences after a collision between an American passenger jet and a US army helicopter on Wednesday night. UPS (UPS) shares tumbled after the company announced it would scale back Amazon deliveries and lowered its 2025 revenue outlook.
Analyst Insights
Goldman Sachs maintains its rate-cut mindset, predicting rate drops in 2025. Jefferies downgraded Apple's stock last week, citing lower-than-anticipated results. Deutsche Bank highlights the uncertainty around the path for rates due to economic policy shifts.