US Stocks Mixed on Tariff Policy

US stocks closed mixed on Tuesday as investors weighed the potential impact of President Trump's proposed tariffs. The Dow Jones Industrial Average (^DJI) eked out a gain of around 0.3%, while the S&P 500 (^GSPC) closed nearly flat. The tech-heavy Nasdaq Composite (^IXIC) slipped about 0.4%.

Powell Testifies Before Congress

Federal Reserve Chair Jerome Powell testified before Congress, emphasizing the importance of monetary policy independence and reiterating that the central bank is not in a rush to cut rates. He acknowledged that inflation remains elevated and that housing prices are likely to remain high despite declining mortgage rates.

Trade Uncertainty Looms

President Trump's announcement of sweeping tariffs on steel and aluminum imports has raised concerns among investors. The European Union has vowed to retaliate, fueling fears of a trade war. Trump is expected to unveil further tariff plans targeting countries that impose levies on US goods.

CPI Data on Wednesday

Investors will be closely watching the release of the January Consumer Price Index (CPI) on Wednesday. Economists expect headline inflation to remain at 2.9%, but core inflation, which excludes food and energy, is forecast to decline to 3.1%.

SVB Collapse Prompts Playbook Revisions

Powell revealed that the Federal Reserve has revised its playbook following the collapse of Silicon Valley Bank in 2023. He highlighted the need for closer monitoring of interest-rate risk and an unstable funding base within large financial institutions.

Inflation Impact on Coca-Cola

Coca-Cola's management team discussed the potential impact of tariffs and inflation during its earnings call. The beverage giant expects commodity costs to rise in the low-single digits, particularly for agricultural products. However, the company said it has mechanisms in place to manage these pressures.

Tech Check: Tesla Dragged Down

The Nasdaq Composite underperformed other indices due to weakness in megacap tech stocks, including Tesla. The automaker fell over 5% as Chinese automaker BYD announced a partnership with DeepSeek to develop autonomous technology.

Gold Surges on Tariff Threats

Gold prices surged, continuing their strong start to the year, as investors sought safe haven assets amid tariff worries. Analysts expect gold to continue its rally as risk sentiment remains fragile and demand stays strong.