US Stocks Dip as Investors Brace for Trump's Tariff Shifts
US stocks opened lower on Tuesday as investors anxiously awaited President Trump's announcement of universal tariffs. The Dow Jones Industrial Average (^DJI) and S&P 500 (^GSPC) both shed 0.3%, while the Nasdaq Composite (^IXIC) retreated by 0.5%.
Investors are concerned about the potential impact of the tariffs on corporate earnings, global economy, and inflation. Gold prices reached a new record as investors sought safe havens amid the uncertainty.
Powell Testimony on Inflation Eyed
Federal Reserve Chair Jerome Powell will testify before Congress on Tuesday and Wednesday, providing clues on the Fed's thinking regarding the effects of tariffs on pricing pressures. The Consumer Price Index for January will be released on Wednesday, followed by the Wholesale Price Index on Thursday.
Coca-Cola and Shopify Share Performance
Coca-Cola (KO) shares gained after the company exceeded fourth-quarter revenue and profit estimates due to strong soda demand despite price increases. Shopify (SHOP) stock rebounded from pre-market losses after reporting better-than-expected holiday sales, despite a disappointing first-quarter profit forecast.
Meta Layoffs and Musk's Bid for OpenAI
Meta (META) has begun laying off employees as part of CEO Mark Zuckerberg's strategy to cut thousands of jobs and pivot towards acquiring AI talent. Elon Musk's bid to acquire OpenAI was rejected, with the non-profit's CEO dismissing the $97.4 billion offer as significantly below its valuation.
Oil Gains Amid Sanctions on Russia
Oil futures rose 1.4% on Tuesday, extending gains to a third day. Signs of US sanctions impacting Russian crude output have boosted prices. Bloomberg reported a decline in Russian oil production in January and deeper discounts offered to Chinese buyers.
Trump's Policy Moves Unexpected
Financial institutions are surprised by President Trump's recent policy shifts, undermining expectations. David Hollerith reports on this phenomenon in his article, "The Start of Trump 2.0 is Not Quite What Wall Street Expected."
Asian Stocks Slide Over Tariffs
Stock indexes in Asia fell on Tuesday due to concerns about the impact of Trump's tariffs. Hong Kong's Hang Seng (^HSI) dropped over 1%, while Chinese automakers Xpeng and Geely Auto declined in Hong Kong. The Sensex in Bombay experienced a 1.3% decrease amid fears over the effects of the tariffs on aluminum exports to the US.