US Stocks Surge as Trump Delays Tariff Implementation
New York, February 13, 2025 - US stocks rallied on Thursday after President Donald Trump announced his plan to introduce reciprocal tariffs while delaying their implementation. Investors weighed the news alongside another report that indicated inflation remains a concern.
The Dow Jones Industrial Average (^DJI) climbed over 0.7%, or 350 points, while the S&P 500 (^GSPC) gained over 1%, closing just shy of its record close at 6,115.06. The tech-heavy Nasdaq Composite (^IXIC) jumped more than 1.5% as Nvidia (NVDA) and Tesla (TSLA) rallied.
Markets initially reacted positively to Trump's latest tariff announcement. In a briefing, Trump called for "fair and reciprocal" tariffs on all US trading partners. However, the measure he signed omitted immediate implementation, with tariffs potentially taking effect in April, allowing for negotiation with countries before then.
Meanwhile, January's Producer Price Index (PPI) showed that wholesale inflation persists, following a similarly elevated consumer inflation report that had tempered optimism for an interest rate cut.
Earnings season continues to produce solid results, with a majority of S&P 500 companies beating estimates thus far. Robinhood (HOOD) shares soared following a fourth-quarter earnings beat announced after Wednesday's closing bell. However, Reddit (RDDT) stock fell amidst a miss in user growth.
Airbnb (ABNB) shares surged over 15% after the company exceeded Wall Street expectations for revenue and earnings per share in the fourth quarter. Meta (META) also gained ground, closing higher for the 19th consecutive trading session.
Analysts expect a stock picker's market in 2025, with a broader range of companies outperforming the S&P 500 compared to recent years. However, the "Magnificent Seven" tech stocks continue to lead the gains.
Additionally, fears that tariffs could prompt the Federal Reserve to raise interest rates have subsided. Economists believe the Fed will likely prioritize labor market conditions and wage growth over the potential inflationary impact of tariffs.
Despite uncertainties surrounding tariffs and inflation, US stocks maintained a positive trajectory on Thursday, with investors remaining cautiously optimistic.