US Stocks Edge Lower Amid Tariff Concerns and Powell Testimony

US stocks retreated on Tuesday as investors braced for President Donald Trump's planned tariff announcements. The Dow Jones Industrial Average (DJI) declined around 0.2%, while the S&P 500 (GSPC) dropped roughly 0.1%. The tech-heavy Nasdaq Composite (IXIC) also pulled back about 0.1% after a positive day on Wall Street.

Investors are uncertain how Trump's tariff threats will translate into action, raising concerns about the impact on corporate earnings, the global economy, and inflation. Gold (GC=F) hit a record high as investors sought safety, before retreating on Tuesday.

Federal Reserve Chair Jerome Powell's two-day testimony in Congress, starting with the Senate on Tuesday, is being closely watched for insights on how the Fed views the potential impact of tariffs on inflation. In his opening remarks, Powell indicated that the Fed is not in a rush to adjust interest rates.

Meanwhile, anticipation builds for January's Consumer Price Index reading on Wednesday and its wholesale counterpart on Thursday, as inflation remains persistent.

In earnings news, Coca-Cola (KO) shares rose after beating estimates for fourth quarter profit and revenue. Shopify's (SHOP) stock rebounded from pre-market losses after the e-commerce company reported a downbeat first quarter profit forecast with better-than-expected holiday sales.

In the tech sector, Meta (META) began laying off workers as part of CEO Mark Zuckerberg's plan to cut thousands of jobs and pivot towards AI.

Powell's Testimony Highlights

* Powell stated that housing prices are likely to remain elevated despite potential declines in mortgage rates.
* He confirmed that there will be a regulatory framework for stablecoins, which the central bank supports.
* Powell declined to comment on the Fed's role in trade policy, emphasizing that it is the prerogative of elected officials.
* He refrained from assessing whether the US has achieved a "soft landing" in its economy.
* Powell acknowledged that the playbook for mitigating banking risks has been revised following the collapse of Silicon Valley Bank (SVB).
* In prepared remarks, Powell reiterated that the Fed does not need to rush in cutting interest rates, given the current economic strength and less restrictive monetary policy stance.

Other Notable News

* Oil prices rose amid signs that US sanctions are affecting Russian supply.
* Asia stocks declined as investors evaluated the impact of Trump's tariffs.
* Hong Kong's Hang Seng (HSI) dropped over 1%.
* Chinese automaker shares fell following BYD's introduction of free smart-driving systems.
* Gold (GC=F) continues to benefit from market uncertainty, reaching an all-time high.