US Stocks Muted as Investors Await Fed and Trump Policy Moves

US stocks remained largely unchanged on Tuesday, kicking off a holiday-shortened trading week. Investors were focused on potential policy announcements from the Federal Reserve and President Donald Trump.

The Dow Jones Industrial Average (^DJI) and Nasdaq Composite (^IXIC) hovered around flatline, while the benchmark S&P 500 (^GSPC) rose slightly to trade near an all-time high.

Stock markets in Europe (^STOXX) remained near record highs as traders anticipated increased defense spending in the region.

Fed Policy in Focus

Investors were closely monitoring Wednesday's release of minutes from the Fed's January meeting for insights into policymakers' stance on interest rates. Fed officials have indicated they believe rates should remain unchanged to address rising inflation.

Interest Rates and Market Performance

Treasury yields climbed as investors sought clues about the likelihood of rate cuts this year. The benchmark 10-year yield (^TNX) rose to trade around 4.51%.

Trade War Concerns

Uncertainty over ongoing trade tensions between the US and China, as well as the potential impact of President Trump's tariffs, remained a concern for investors.

Earnings Season Continues

Baidu (BIDU) reported a smaller-than-expected revenue decline, easing concerns about AI rivalry. However, its shares fell following the announcement.

Bullish Sentiment on Stocks

Despite concerns, fund managers remain bullish on stocks, according to Bank of America's latest survey. Cash levels have fallen to 15-year lows.

Chip Stocks Surge

Nvidia (NVDA), Micron (MU), and Intel (INTC) led gains in tech stocks, pushing the S&P 500 higher.

Ukraine Talks Impact

Stocks in Europe paused as the US and Russia held talks aimed at ending the Ukraine war. Defense stocks remained bullish amid the discussions.

Homebuilder Confidence Falls

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

Broadcom and TSMC Eye Intel

Intel (INTC) shares jumped after reports surfaced that Broadcom (AVGO) and TSMC (TSM) are exploring potential deals that could split the chipmaker into two.