US Stocks Open Lower as Investors Await Fed Minutes and Weigh Tariff Threats
US stocks commenced trading in the red on Wednesday, as investors navigate the latest 25% tariff salvo announced by President Trump and anticipate the release of Federal Reserve minutes for insights into future monetary policy. The S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) each declined by around 2%, while the Dow Jones Industrial Average (^DJI) dropped by 0.4%.
Markets are adopting a wait-and-see approach, awaiting the true impact of President Trump's tariff threats. However, stocks have remained largely resilient, with the S&P 500 (^GSPC) setting a new record on Tuesday, suggesting that markets might be able to withstand Trump's rapid trade policy adjustments.
Another tariff threat emerged on Tuesday evening when the president announced plans for additional duties on automobiles, semiconductors, and pharmaceuticals. A flat tariff of "around 25%" would be levied against foreign auto manufacturers starting from April 2, according to his statement.
Investors are exercising caution ahead of the release of minutes from the Federal Reserve's January meeting, scheduled for Wednesday afternoon. Commentary from policymakers will be scrutinized for their views on the potential inflationary impact of Trump's tariffs and the implications for potential rate cuts.
Amidst the earnings season winding down, Etsy (ETSY) released disappointing results early on Wednesday. Microsoft (MSFT) and Apple (AAPL) are expected to unveil product announcements later today.
Company Updates
* Super Micro Stock Recovers from Hindenburg Report Losses
Super Micro Computer (SMCI) shares surged 6% on Wednesday, continuing a weeklong rally that has erased losses stemming from last summer's scathing report accusing the server maker of accounting violations. The rally brings the stock to its highest level since August 26, just before the publication of the Hindenburg Research report.
* Hims & Hers Soars on At-Home Lab Testing Facility Acquisition
Shares of Hims & Hers (HIMS) climbed by as much as 20% early on Wednesday following the announcement of plans to introduce at-home lab testing through its platform. The acquisition of Trybe Labs will enable Hims & Hers to expand into blood testing services.
* Alibaba Rumored to Invest in DeepSeek
The Information reports that DeepSeek, the operator of a Chinese AI chatbot, is seeking funding from Alibaba (BABA) and Chinese-state affiliated institutions. Should DeepSeek accept Alibaba's investment, it could signal a shift in its business model, potentially leading to a focus on revenue generation and profitability.
* Etsy Stock Drops on Holiday Sales Shortfall
Etsy (ETSY) shares fell by approximately 6% in premarket trading after the online marketplace reported holiday sales that fell below analyst expectations. Despite a modest 1.2% annual growth, revenue and gross merchandise sales both missed estimates.
* European Stocks Retreat on Earnings Disappointment and Tariff Concerns
The European stock market rally paused on Wednesday due to underwhelming earnings and apprehension about Trump's proposed tariffs. The pan-European Stoxx 600 (^STOXX) index declined by 0.5% after reaching an all-time high on Tuesday.
* Nikola Files for Bankruptcy
Nikola (NKLA) filed for bankruptcy on Wednesday, marking the end of a tumultuous period for the electric-vehicle maker. The filing includes assets valued between $500 million and $1 billion, and liabilities ranging from $1 billion to $10 billion.
* Trump Plans 25% Tariffs on Autos
President Trump imposed a 25% tariff on imported automobiles, semiconductors, and pharmaceuticals, effective early April. This move intensifies the risk for global automakers, including US-based companies, which were already facing potential tariffs on imports from Mexico.
* Asia Stocks Slump on Tariff Threats and Chinese Stock Rally Concerns
Asian markets experienced a downturn on Wednesday, erasing a five-day rally amid concerns over President Trump's tariff threats and the sustainability of a recent rally in Chinese stocks.
* HSBC Beats Profit Expectations, Announces Share Buyback
HSBC (HSBC) reported a 6.6% increase in annual profit in its latest quarterly earnings report, exceeding market expectations and mitigating concerns over falling interest rates. The bank also announced a share buyback plan.
* Oil Gains on US-Russia Peace Talks
Oil prices rallied on Wednesday against the backdrop of the ongoing Ukraine-Russia conflict. Markets anticipate a swift response to the US-Russian peace talks in the evolving situation.