US Stocks Mixed Amid Tariff Shifts and Inflation Concerns
US stocks traded mixed on Tuesday as investors weighed tariff adjustments by President Trump and anticipated upcoming inflation data. Jerome Powell, the Federal Reserve Chair, provided reassuring remarks during his Congressional testimony, indicating a moderate approach to interest rate adjustments.
While the Dow Jones Industrial Average (DJI) gained around 0.2%, the S&P 500 (GSPC) remained largely unchanged. The tech-heavy Nasdaq Composite (IXIC) fell approximately 0.3%, retreating from gains witnessed previously.
Investors remained cautious ahead of Trump's announcement of universal tariffs, which is expected to impact top trading partners Canada and Mexico. The market is also closely monitoring the upcoming release of the Consumer Price Index on Wednesday and its wholesale counterpart on Thursday, as inflation continues to persist.
Earnings and Analyst Updates
Coca-Cola (KO) shares rose after exceeding fourth-quarter profit and revenue estimates due to robust soda demand despite price increases. Shopify (SHOP) bounced back after pre-market losses, reporting a downbeat first-quarter profit forecast but better-than-expected holiday sales.
Super Micro Computer (SMCI) stock declined after a five-day rally, as investors await the company's business update on February 11th. The stock has been on an upswing ahead of this event, but remains below its all-time high amidst concerns about meeting analyst expectations and resolving an ongoing legal battle.
Tech stocks faced headwinds on Tuesday. Tesla (TSLA) dropped over 5% after Chinese automaker BYD announced a partnership with DeepSeek to develop autonomous technology. Meta (META) initiated layoffs as part of its pivot towards artificial intelligence talent acquisition.
Gold and Economic Commentary
Gold prices took a breather after a 10% surge since the start of the year. However, analysts at UBS anticipate further gains due to tariff uncertainty and potential rate cuts from the Federal Reserve later in the year.
Powell emphasized the importance of Fed independence and downplayed the central bank's role in commenting on trade policy. He also predicted that while mortgage rates may decline, housing prices are likely to remain elevated due to short-term disruptions and a longer-term housing availability issue.
Powell confirmed that "there will be a regulatory framework" for stablecoins, supporting efforts to create a safe and secure environment for consumers.