US Stocks Close Higher on Wednesday Amid Tariff Uncertainty
US stocks closed higher on Wednesday as investors weighed President Trump's latest 25% tariff salvo and digested the Federal Reserve minutes for insight into future policy. The S&P 500 (^GSPC) gained 0.2%, reaching a fresh record high of 6,144.15, after notching a record on Tuesday as well. The Nasdaq Composite (^IXIC) and the Dow Jones Industrial Average (^DJI) both rose about 0.1%.
Fed Minutes: Policy Held at Restrictive Levels
Minutes from the Fed's January meeting revealed that most central bank officials supported holding policy at restrictive levels amid concerns about persistent inflation. The committee emphasized that it was well-positioned to assess the economic outlook and that further progress on inflation was needed before adjusting rates.
Trade Tensions: Trump Unveils New Tariffs
On the trade front, Trump's fast-moving policy overhaul has been top of mind for investors waiting to assess the impact of tariffs. Late on Tuesday, the president announced plans to implement additional duties on automobiles, chips, and pharmaceuticals. The tariffs would apply to all foreign automakers and start as soon as April 2, he said.
Market Sentiment: Fed Cut Hopes Fade
Despite the market's gains, key market convictions remain as hopes for Fed rate cuts have softened. The minutes reiterated that the Fed could continue cutting interest rates later this year, but investors anticipate an interest rate decrease at some point.
Short Sellers Lose Billions
Short sellers, who bet against stock prices, have had a tough start to 2025. S3 Partners data shows they have lost $73 billion in US and Canadian markets, as the S&P 500 has risen about 4%. Super Micro Computer (SMCI) is one notable stock that has seen large jumps due to short squeezes.
Intel's Stock Falls
Intel (INTC) stock declined more than 5% on Wednesday, ending a massive upswing. The decline came after analysts expressed skepticism over reports of potential deals with TSMC and Broadcom to break up the chipmaker.
Apple Faces Tariff Pressure
Bank of America analysts estimate that Trump's proposed 10% tariff on all Apple products imported into the US could have a negative earnings impact of 2% to 3%. Apple may have to raise prices to offset the impact of the tariffs.
Magnificent Seven Struggle
The "Magnificent Seven" tech stocks—Apple, Alphabet, Microsoft, Amazon, Meta, Tesla, and Nvidia—have underperformed the broader market in 2025. The performance rankings of most of these companies have tumbled year to date.
iPhone 16e Debuts
Apple unveiled the iPhone 16e, a budget-friendly option with features such as Face ID and a 48-megapixel camera, with a price tag of $599.
Super Micro Recovers
Super Micro Computer stock extended its recent surge, recovering its losses from a report alleging accounting violations last year. The company has been buoyed by its partnership with Nvidia and a major deal with Elon Musk's xAI data center.
Hims & Hers Acquires Trybe Labs
Hims & Hers (HIMS) stock rallied on news of its acquisition of Trybe Labs, which will allow the company to offer at-home lab testing.
Alibaba Eyes DeepSeek Investment
Reports indicate that Alibaba is considering investing in DeepSeek, the operator of an upstart Chinese AI chatbot. This potential funding could mark a shift in DeepSeek's business model.
Electric Vehicle Maker Nikola Files for Bankruptcy
Nikola (NKLA) filed for Chapter 11 bankruptcy, ending a turbulent history for the former electric vehicle darling.
Etsy Disappoints on Holiday Sales
Etsy (ETSY) shares dropped in premarket trading after reporting disappointing holiday sales. The company cited weakness in gift spending.
European Stocks Retreat
European stock markets pulled back on Wednesday as disappointing earnings and tariff concerns weighed on sentiment. Philips shares fell after the medical gear maker forecasted lower sales due to weak Chinese spending.
Trump Threatens Auto Tariffs
President Trump announced plans for 25% tariffs on auto imports from early April. The move has sparked concern among automakers, including Stellantis, Toyota, and Volkswagen.
Asian Stocks Slump
Asian markets reversed a five-day rally on Wednesday, pressured by Trump's tariff threats and worries about Chinese stock valuations.
HSBC Beats Estimates
HSBC reported better-than-expected profits and announced a share buyback program. The multinational banking corporation benefited from higher interest rates and cost-cutting measures.
Oil Gains on Peace Talks
Oil prices moved higher as peace talks between Russia and Ukraine progressed. The market anticipates a potential resolution to the conflict, which has disrupted global oil supplies.