US Stocks Mostly Higher as Market Digests Trump's Tariffs and Fed Minutes
On Wednesday, most US stocks traded higher as investors weighed President Trump's announcement of further tariffs and the release of the Federal Reserve's meeting minutes from January.
The benchmark S&P 500 (^GSPC) moved up by around 0.2% after setting a new record high on Tuesday, while the tech-heavy Nasdaq Composite (^IXIC) remained near the flatline. The Dow Jones Industrial Average (^DJI) rose by approximately 0.1%.
Fed's Restrictive Policy Stance
The minutes from the Fed's January meeting revealed that a majority of central bank officials favored maintaining restrictive policy. The minutes indicated that policymakers would consider holding the policy rate at a restrictive level if the economy remains strong and inflation persists. However, they also noted that policy could be eased if labor market conditions deteriorate or inflation falls more quickly than anticipated.
Participants acknowledged that the committee is well-positioned to assess the evolving economic outlook and emphasized the need for further progress on inflation before adjusting rates. They pointed to potential upside risks to the inflation outlook, particularly due to possible changes in trade and immigration policy.
Trump's Tariff Announcements
On the trade front, Trump's latest round of tariffs has been a major focus for investors. On Tuesday, the president announced additional tariffs on autos, chips, and pharmaceuticals. A 25% tariff would be imposed on all foreign automakers starting April 2. Last week, Trump had announced 25% tariffs on steel and aluminum imports, effective March 12. Reciprocal tariffs on trading partners have also been ordered to be studied.
Short Squeeze Impacts
Short sellers, who bet on stock prices falling, have been facing losses amid the market rally. According to data from S3 Partners, short sellers have lost $73 billion in the US and Canadian markets since the start of 2025. Companies like Super Micro Computer (SMCI), Hims & Hers Health (HIMS), and Oklo (OKLO) have seen large jumps in their stock prices due to short squeezes.
Intel Stock Declines
Shares of Intel (INTC) fell sharply on Wednesday, ending a significant upswing. The decline came amid skepticism from analysts over potential deals with TSMC and Broadcom, which could have broken up the US chipmaker.
Apple Faces Tariff Pressures
Bank of America analysts have suggested that Apple (AAPL) may need to raise prices if Trump's proposed tariffs are implemented. The firm estimated that a 10% tariff on all Apple products imported into the US could negatively impact earnings by 2% to 3%.
Tech Stocks Lag
The "Magnificent Seven" tech stocks (Apple, Alphabet, Microsoft, Amazon, Meta, Tesla, and Nvidia) have struggled in the early part of 2025, with most falling in the bottom half of performance among S&P 500 members.
Other Notable Events
* Apple unveiled the iPhone 16e with an A18 chip and a $599 price tag.
* Super Micro Computer stock surged, recovering losses from a scathing report earlier.
* Hims & Hers shares rose after the company announced plans for at-home lab testing.
* DeepSeek, a Chinese AI chatbot operator, may seek funding from Alibaba.
* Nikola, an electric vehicle maker, filed for bankruptcy.
* Etsy stock fell after holiday sales missed estimates.
* European stocks retreated amid disappointing earnings and tariff concerns.
* Trump plans to impose 25% tariffs on autos, chips, and pharmaceuticals.
* Asian markets declined due to tariff threats and concerns over the sustainability of Chinese stock rallies.
* HSBC announced a share buyback after beating profit expectations.
* Oil prices rose as US-Russia peace talks continued amidst the Ukraine conflict.