US Stocks Edge Higher Amid Tariff Delay and Inflation Concerns
U.S. stocks climbed on Thursday as President Donald Trump announced plans for reciprocal tariffs but delayed their implementation. Investors also digested another inflation report that suggested rising price pressures.
The Dow Jones Industrial Average (^DJI) gained over 0.7%, or more than 350 points, while the S&P 500 (^GSPC) advanced by over 1%, closing at 6,115.06, just shy of its record close of 6,118.71. The tech-heavy Nasdaq Composite (^IXIC) rose more than 1.5% as Nvidia (NVDA) and Tesla (TSLA) rallied.
Markets reacted positively to Trump's tariff announcement. In a briefing, Trump called for "fair and reciprocal" tariffs on all U.S. trading partners. However, the measure fell short of immediately implementing these tariffs, instead allowing wiggle room for negotiations.
Meanwhile, the January Producer Price Index (PPI) indicated that wholesale inflation remains elevated, following a similar increase in consumer inflation, tempering optimism for interest rate cuts.
Earnings season continues to produce solid results, with over 70% of S&P 500 companies reporting beats so far. Robinhood (HOOD) shares soared after reporting a Q4 profit beat, while Reddit (RDDT) stock tumbled amid disappointing user growth.
Airbnb Surges on Revenue Beat
Airbnb (ABNB) stock rose more than 15% after the company surpassed Wall Street's expectations for revenue and earnings per share in the fourth quarter. The company reported revenue of $2.48 billion, above estimates of $2.42 billion.
Meta Extends Winning Streak
Meta (META) added less than 1% on Thursday, closing higher for the 19th consecutive trading session. The stock is now up over 24% this year.
Rate Hikes on the Table, Unlikely to be Prompted by Tariffs
Wall Street is mulling the possibility of an interest rate hike from the Federal Reserve in the latter half of 2025 or 2026. After a hotter-than-expected consumer price index, analysts believe hikes are less inconceivable but unlikely to be triggered by Trump's tariffs.
Trump Signs Reciprocal Tariffs, Delays Implementation
Trump signed his plan for reciprocal tariffs on both "friend and foe" but delayed their implementation. India's Prime Minister Narendra Modi is expected to visit the White House to discuss potential mitigations.
Arm Gains on Arm's New Chip Report
Arm stock rose more than 7% after the Financial Times reported that Arm will launch its own AI chip with Meta as one of its first customers. The chip unveiling is expected as early as this summer.
Mortgage Rates Creep Lower
30-year mortgage rates fell slightly to 6.87% despite volatility in bond markets. The rate remains near its lowest level in 2025 after hitting a year-to-date high of 7.04% in mid-January.
Inflation Relief in Details
Economists found positive news for the Fed's inflation fight in the details of hot inflation readings. January's Consumer Price Index (CPI) and PPI suggest underlying price increases likely decreased.
Nvidia, Tesla Lead Tech Sector Gains
Shares of Nvidia (NVDA) gained more than 3%, while Tesla (TSLA) rose over 4%, buoying the tech-heavy Nasdaq Composite (^IXIC). Meta (META) pared modest gains but remained close to the flat line.
Oil Dips as Ukraine Peace Efforts Discussed
Oil prices pared losses after the market discounted efforts to initiate peace talks in Ukraine. President Trump hinted at discussions with President Vladimir Putin regarding Russia's willingness to end the conflict.
Musk Withdraws OpenAI Bid if For-Profit Conversion Halted
Elon Musk is prepared to withdraw his $97.4 billion bid for OpenAI if its board stops the transformation of the ChatGPT maker to a for-profit enterprise. The move escalates his feud with OpenAI CEO Sam Altman.