US Stocks Mixed Amid Tariff Uncertainty and Inflation Watch

US stocks closed mixed on Tuesday as investors digested President Trump's tariff policy shifts and looked ahead to upcoming inflation data.

The Dow Jones Industrial Average (DJI) edged higher by 0.3%, while the S&P 500 (GSPC) closed nearly flat. The Nasdaq Composite (IXIC) declined by 0.4%.

Investors cautiously await Trump's plan for universal tariffs, expected to be announced midweek. On Monday, he imposed 25% tariffs on all steel and aluminum imports from March 12, putting pressure on Canada and Mexico.

Meanwhile, the Consumer Price Index (CPI) reading for January is scheduled for Wednesday, along with its wholesale counterpart on Thursday, as inflation remains a concern.

Super Micro Reports Mixed Results

Super Micro Computer (SMCI) reported preliminary quarterly earnings below Wall Street estimates. The company expects revenue between $5.6 billion and $5.7 billion for the December quarter, short of the $5.95 billion anticipated by analysts. However, Super Micro also announced it expects to meet the filing deadline to avoid delisting by Nasdaq on February 25.

Intel Stock Surges on AI Chips Promise

Intel (INTC) shares jumped 6.5% after US Vice President JD Vance said President Trump will ensure AI systems are built with US-made chips. Intel is the only leading-edge computer chip foundry in the US that manufactures chips for itself and other companies.

Inflation Report Expected to Show Persistent Inflation

Economists expect January's CPI report to show headline inflation of 2.9%, matching the annual gain seen in December. Core inflation, excluding food and gas, is projected to rise 3.1%, the lowest level since April 2021. However, monthly core price increases are expected to be slightly higher than in December.

Gold Demand Rises on Tariff Threats

Gold prices fell back after a recent surge, but Wall Street predicts further gains due to tariff announcements. UBS Global Wealth Management forecasts gold reaching $3,000 per ounce in 2025 due to fragile risk sentiment and strong demand.

Powell Emphasizes Fed Independence

Fed Chair Jerome Powell stressed the importance of central bank independence during his testimony before Congress. He stated that the Fed should focus on monetary policy and avoid political interference to make better policy and reduce inflation.

Powell Warns of Elevated Housing Prices

Powell also noted that housing prices are likely to remain elevated, even if mortgage rates decline. He attributed this to a limited supply of houses in many parts of the country.

Powell Supports Regulation for Stablecoins

Powell expressed support for a regulatory framework for stablecoins, cryptocurrencies designed to have a stable price. He emphasized the need for consumer protection and sound practices in the development of stablecoins.

Powell Declines to Comment on Trade Policy

Powell reiterated that it is not the Fed's role to comment on trade policy, as it is up to elected officials. He added that it is unclear when or if specific tariff policies will be implemented.

Powell: Economy Not in 'Soft Landing'

Powell declined to speculate on whether the US economy has achieved a "soft landing," where growth slows without triggering a recession. However, he stated that the economy is not in a "hard landing" scenario, where restrictive monetary policy forces recession.

SVB Collapse Prompts Playbook Revision

Powell acknowledged that the Federal Reserve's playbook has been revised following the collapse of Silicon Valley Bank (SVB) in 2023. He noted that supervisors had not adequately focused on interest-rate risk and the mismatch between long-term securities and an unstable funding base.