US Stocks Rise on Delayed Tariff Implementation and Inflation News
US stock markets surged on Thursday as investors cheered President Trump's announcement of planned reciprocal tariffs while delaying their implementation and digesting another report suggesting inflation remains persistently high.
The Dow Jones Industrial Average (^DJI) surged over 350 points, or 0.7%, while the S&P 500 (^GSPC) gained over 1% to close at 6,115.06, just shy of its record high. The Nasdaq Composite (^IXIC) climbed more than 1.5%, led by gains in Nvidia (NVDA) and Tesla (TSLA).
Markets shrugged off Trump's latest tariff announcement, which calls for "fair and reciprocal" tariffs on all US trading partners. However, the measure signed by Trump stopped short of immediate implementation, giving countries wiggle room to negotiate before the tariffs take effect in April.
Meanwhile, the Producer Price Index (PPI) for January indicated that wholesale inflation remains sticky, following a similar hot reading for consumer inflation in the month before. This tempered optimism for an interest rate cut.
Earnings season continued to deliver solid results, with a majority of S&P 500 companies reporting better-than-expected profits. Robinhood (HOOD) shares soared after reporting strong fourth-quarter earnings, while Reddit (RDDT) stock tumbled as the company missed estimates for user growth.
Despite a volatile stock market in 2025, tech stocks have been a standout, with Meta (META) closing higher for the 19th consecutive trading session. However, only Meta and Amazon (AMZN) among the "Magnificent Seven" tech stocks have outperformed the S&P 500's roughly 4% gain this year.
Wall Street analysts are pondering the possibility of an interest rate hike from the Federal Reserve in the second half of 2025 or 2026. While the tariffs could push inflation higher, analysts believe the Fed will likely look through these one-time direct price increases. Instead, they speculate that a labor force shortage due to potential mass deportations could prompt hikes as employers face pressure to raise wages.
President Trump's plan for reciprocal tariffs on "both friend and foe" drew mixed reactions. Some analysts believe it could hinder economic growth and demand for oil, while others see it as a bargaining chip in ongoing trade negotiations.
In other news:
* Arm stock surged on reports of a new chip launch with Meta as a customer.
* 30-year mortgage rates crept down to 6.87%, remaining within a narrow band.
* Positive signs emerged in the details of recent inflation readings, suggesting price increases may have eased in January.
* Oil prices dipped as traders assessed the impact of retaliatory US tariffs and peace efforts in Ukraine.
* Elon Musk threatened to withdraw a $97.4 billion bid for OpenAI if its board prevented its conversion to a for-profit entity.
* Apple reportedly plans to use Alibaba AI for its iPhone in China.