Mixed US Stock Market Performance as Investors Eye Fed Policy and Trump's Tariffs

US stocks closed mixed on Tuesday, with the Dow Jones Industrial Average (^DJI) and Nasdaq Composite (^IXIC) recording declines, while the S&P 500 (^GSPC) managed a slight gain.

Fed Policy in Focus

Investors remained cautious following the recent closure for Presidents Day as they anticipate the release of minutes from the Fed's January meeting on Wednesday. Fed officials have emphasized the need for maintaining current interest rates to combat inflation.

S&P 500 Nears Record High

Despite the declines in the Dow and Nasdaq, the S&P 500 remained close to its all-time high, boosted by positive performance in technology and chip stocks.

Ukraine War Talks

The ongoing talks between US and Russian officials aimed at ending the Ukraine war are also impacting market sentiment.

Earnings Season Continues

With results from 46 S&P 500 companies expected this week, including Baidu (BIDU) on Thursday, earnings season continues to influence market direction.

Impact of Strong Dollar on Tech Giants

The surge in the US dollar (DX=F, DX-Y.NYB) over the past six months has negatively affected the earnings of large technology companies with significant overseas revenue, such as Apple (AAPL), Alphabet (GOOG), and Microsoft (MSFT).

Super Micro Stock Gains

Super Micro Computer (SMCI) stock rallied after the company provided an update on its efforts to avoid delisting from the Nasdaq.

Optimism for Stocks

Despite the recent decline in the Dow and Nasdaq, investors remain optimistic about stocks, with cash levels falling to 15-year lows, according to Bank of America's fund manager survey.

Economic Data

The Empire Manufacturing index for February and the NAHB housing market index for the same month are scheduled for release later today.

Homebuilder Confidence Drops

The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index fell to 42 in February, indicating less optimism among builders due to tariffs, high mortgage rates, and housing costs.

Chip Stocks Lead Rally

Chip stocks, including Nvidia (NVDA) and Micron (MU), led the market rally on Tuesday, while tech giants like Intel (INTC) and Super Micro Computer (SMCI) also recorded gains.

Europe Stocks Hold Steady

European stocks traded within a narrow range on Tuesday as the US and Russia discussed ending the Ukraine war. Defense stocks like Rheinmetall (RHM.DE) and Dassault (DSY.PA) reached new all-time highs.

Trade War Risk

A global trade war is now considered the biggest risk to markets, according to a Bank of America survey, with 42% of fund managers citing it as a major concern.