US Stocks Extend Gains Amid Tariff Concerns
US stocks closed higher on Wednesday as investors weighed President Trump's latest 25% tariff announcement and digested the Federal Reserve's meeting minutes for insights into future monetary policy.
The benchmark S&P 500 (^GSPC) rose approximately 0.2%, hitting a new record high of 6,144.15, building on Tuesday's record close. The Nasdaq Composite (^IXIC) and the Dow Jones Industrial Average (^DJI) both gained around 0.1%.
Wednesday's minutes from the Fed's January meeting revealed that most central bank officials supported maintaining a restrictive monetary policy due to concerns about persistent inflation. "Many participants noted that the Committee could hold the policy rate at a restrictive level if the economy remained strong and inflation remained elevated," the minutes stated. However, some officials indicated that monetary policy could be eased if labor market conditions deteriorated or inflation returned to the Fed's target of 2% sooner than expected.
On the trade front, investors remain focused on Trump's rapidly changing tariff policies. On Tuesday, the president announced plans for additional tariffs on automobiles, semiconductors, and pharmaceuticals, with a flat 25% tariff set to take effect on foreign automakers starting April 2. This follows Trump's previous announcement of 25% tariffs on steel and aluminum imports.
Short Sellers Suffer Losses as Market Surges
Short sellers, who bet on stock prices falling, have lost $73 billion in the US and Canadian markets since the beginning of 2025, according to data from S3 Partners. This comes as the S&P 500 has gained approximately 4%, driven in part by short squeezes.
Super Micro Computer (SMCI), currently the top performer in the S&P 500, has surged over 110% this year, causing short sellers to lose more than $2.2 billion. Other companies that have experienced significant gains due to short squeezes include Hims & Hers Health (HIMS), Oklo (OKLO), and BigBear.ai (BBAI).
Intel Shares Decline Amid Deal Breakup Concerns
Intel (INTC) shares fell over 5% on Wednesday, reversing a recent surge after reports emerged of potential deals with TSMC and Broadcom to break up the chipmaker. The decline reflects skepticism among analysts about the feasibility of such arrangements.
Fed Minutes Highlight Uncertainties
In addition to policy uncertainties, the Fed's minutes also highlighted other economic unknowns, including the values of the neutral policy rate, the economy's potential growth rate, and the level of maximum employment. The minutes emphasized that these uncertainties would remain key factors in the Fed's decision-making going forward.
Trump's Social Media Posts on Stocks Dwindle
President Trump's social media posts about the stock market have decreased since his return to office. According to a study by JPMorgan strategist Antonin Delair, Trump has mentioned the stock market only once since his reelection, in contrast to his frequent positive posts on economic developments during his first term.
Tariffs Could Impact Apple's Prices
Bank of America analysts estimate that Trump's proposed tariffs could have a negative impact on Apple's (AAPL) earnings, potentially forcing the company to raise prices. The analysts estimate that a 10% tariff on all Apple products imported into the US could reduce earnings by 2-3%, depending on whether or not Apple raises prices.
Apple Introduces New Budget-Friendly iPhone
Apple unveiled its iPhone 16e on Tuesday, a more affordable alternative to its premium models. The iPhone 16e features a design similar to Apple's mid-range iPhones, including Face ID technology and an upgraded camera system. The device, priced at $599, is expected to be available on February 28.
Super Micro Recovers Losses After Short-Selling Report
Super Micro Computer (SMCI) stock extended its gains on Wednesday, fully recovering its losses from a scathing report by short-selling firm Hindenburg Research last year. The company's stock has surged by over 83% in 2025, making it the top performer in the S&P 500 this year.