US Stocks Mixed on Tuesday Amid Policy Uncertainty

US stocks exhibited mixed performance on Tuesday, kicking off a shortened trading week during the Presidents Day holiday.

Dow Jones Industrial Average (DJI): Declined 0.2%

NASDAQ Composite (IXIC): Dipped 0.1%

S&P 500 (GSPC): Gained 0.1%, trading near its all-time high

Fed Policy and Ukraine Talks in Focus

Investors remained cautious after Monday's market closure, weighing the potential impact of the Federal Reserve's future monetary policy moves and President Donald Trump's proposed tariffs.

* Fed officials reiterated their commitment to maintaining interest rates at current levels to combat inflation.
* Treasury yields increased as investors sought clues about the likelihood of rate cuts later this year.
* Wednesday's release of the Fed's January meeting minutes will provide further insights into policymakers' thinking amid Trump's tariffs.
* Talks between the US and Russia on ending the Ukraine war are underway in Saudi Arabia, adding uncertainty to the market.

European Stocks Steady

European stock markets held steady near record highs as investors bet on increased defense spending in the region. Defense stocks like Rheinmetall and Dassault reached new highs.

Earnings Season Continues

Earnings season continues with reports from 46 S&P 500 companies expected this week. Baidu's revenue decline signaled potential challenges for China's tech sector.

Tech Stocks Impacted by Strong Dollar

The surge in the US dollar has negatively impacted large technology companies that generate significant overseas revenue.

* Apple, Alphabet, Microsoft, Tesla, and Meta have all reported headwinds related to the dollar's strength.
* Amazon experienced a significant foreign exchange headwind, leading to a lower revenue growth forecast.

Intel Jumps on Deal Rumors

Intel's stock rose after reports emerged that Broadcom and TSMC are exploring deals to potentially split the chipmaker into two.

Homebuilder Confidence Falls

Builders' confidence in the housing market declined to its lowest level in five months, driven by concerns over tariffs, rising mortgage rates, and high housing costs.

Chip Stocks Lead Market Up

Chip stocks performed well on Tuesday, with Nvidia, Micron, and Intel posting gains. Super Micro Computer, a leader in AI semiconductors, also rose significantly.

Global Equities View

Investors in BofA's latest survey now consider global equities as the best-performing asset class, surpassing US equities.