US Stocks Move Higher Amid Tariff News and Inflation Data
US stocks rallied on Thursday as President Donald Trump announced plans to impose reciprocal tariffs. The Dow Jones Industrial Average (^DJI) gained 0.3%, while the S&P 500 (^GSPC) rose 0.6%. The tech-heavy Nasdaq Composite (^IXIC) surged over 1%, boosted by gains in Nvidia (NVDA) and Tesla (TSLA).
Investors digested the January Producer Price Index (PPI), which showed wholesale inflation remaining elevated. This followed a similar increase in consumer inflation, casting doubt on the Federal Reserve's potential for interest rate cuts.
Earnings season continues with solid results, with over 70% of S&P 500 companies reporting beats so far. Robinhood (HOOD) shares jumped after a profit beat in its fourth quarter. However, Reddit's (RDDT) stock fell amid a miss in user growth.
Arm Soars on Meta Chip News
Arm stock climbed over 7% after reports that it would launch a new AI chip with Meta as a key customer. The Financial Times cited sources claiming the chip could be unveiled as early as summer.
Mortgage Rates Dip
30-year mortgage rates declined slightly this week to 6.87%, remaining close to 6.9%, according to Freddie Mac data. The 15-year mortgage rate rose slightly to 6.09%.
Inflation Readings Show Mixed Signals
Two inflation readings for January exceeded expectations, but economists found positive signs for markets and the Federal Reserve within the data. They estimate that "core" PCE, which excludes food and energy, likely increased 2.6% in January, down from 2.8% in December.
The PPI release sent the 10-year Treasury yield lower, boosting stock prices. The Nasdaq Composite (^IXIC) gained over 1%, while the odds of the Fed holding interest rates steady through July decreased.
Tech Sector Led by Nvidia, Tesla
Nvidia shares rose over 3% on Thursday, lifting the tech-heavy Nasdaq. Tesla also extended gains, rising over 4%. Apple (AAPL) gained more than 1%, while Meta (META) trimmed modest gains.
Oil Dips Amid Ukraine Peace Hopes
Oil prices pared losses after Trump spoke with Russian President Vladimir Putin, raising hopes for a peaceful resolution in Ukraine. West Texas Intermediate crude (CL=F) and Brent futures (BZ=F) declined less than 1%.
Musk Threatens to Withdraw OpenAI Bid
Elon Musk is willing to withdraw his $97.4 billion bid for OpenAI if the nonprofit's directors continue with plans to convert it into a for-profit entity. Musk's lawyers allege that CEO Sam Altman breached his fiduciary duties by rejecting the takeover bid before the board had reviewed it.
Stocks Shake Off Tariff and Inflation Fears
US stocks advanced despite the announcement of reciprocal tariffs and hotter-than-expected inflation data. The Dow Jones Industrial Average (^DJI) rose 0.3%, while the S&P 500 (^GSPC) gained 0.2%. The Nasdaq Composite (^IXIC) increased 0.3%.
Wholesale Prices Rise More Than Expected
Wholesale prices rose 0.4% in January, exceeding expectations of a 0.3% increase. The Producer Price Index (PPI) data highlights the Fed's ongoing challenge in bringing inflation down to its 2% target.