US Stocks Mixed Amid Tariff Uncertainty and Powell Testimony

U.S. stocks traded mixed on Tuesday as investors weighed the implications of President Donald Trump's latest tariff announcements and anticipated the upcoming inflation data.

Traders also digested the start of Federal Reserve Chair Jerome Powell's two-day testimony before Congress. Powell reiterated the Fed's stance of not commenting on trade policy, while emphasizing the importance of central bank independence.

By mid-afternoon, the Dow Jones Industrial Average edged around 0.1% higher, while the S&P 500 dipped by 0.1%. The Nasdaq Composite pulled back about 0.4% after a positive day on Wall Street.

Tariffs and Trade Tensions

The market remains cautious ahead of Trump's expected announcement of retaliatory tariffs against countries that impose levies on U.S. goods. The president has announced 25% tariffs on steel and aluminum imports from March 12.

The European Union has threatened countermeasures, fueling concerns of a trade war. The U.S. is also considering tariffs on China, which has already implemented 10% duties on U.S. goods.

Inflation Concerns

Investors are awaiting the release of the Consumer Price Index and its wholesale counterpart this week. Inflation has remained persistent, adding to market concerns.

Corporate Earnings

Coca-Cola shares rose after beating fourth-quarter profit and revenue estimates. Shopify's stock rebounded after better-than-expected holiday sales, despite a disappointing first-quarter profit forecast.

Other Key Highlights

* Gold surged to an all-time high as the tariff announcements drove up demand for the safe-haven asset. Analysts at UBS see further upside potential for gold amid continued risk aversion and strong demand.
* Powell emphasized the need for Fed independence and transparency.
* Powell indicated that housing prices are likely to remain elevated, even with declining mortgage rates.
* Powell stated that the Fed will not comment on Trump's tariff policy but will react to its effects on the economy.
* Powell declined to comment on whether the U.S. economy had achieved a "soft landing," saying it was "not for me to say."
* Fed Chair Powell acknowledged that the central bank's playbook has been revised following the collapse of Silicon Valley Bank.
* Powell reiterated that the Fed does not need to be in a hurry to cut interest rates, given the still-strong economy and elevated inflation pressures.
* Coca-Cola management discussed the potential impact of tariffs and inflation on its business.
* Asian stock markets fell on Tuesday, with the Hang Seng Index and CSI 300 dropping over 1% and 0.5%, respectively. Concerns over the impact of Trump's tariffs weighed on investor sentiment.