Market Recap: Stocks Rise on Easing Inflation Concerns and Tech Gains
Major Indexes Close Higher as Inflation Fears Subside
U.S. stocks ended higher on Thursday, February 13, 2025, as investors digested new inflation data and updates on U.S. tariff plans. The market’s positive reaction came despite a higher-than-expected producer price index (PPI) report, as traders focused on components that suggested a potentially softer reading in the Federal Reserve’s preferred inflation gauge.
Here’s how the major indexes performed:
– The Dow Jones Industrial Average rose 348 points, or 0.8%, to close at 44,729.60
– The S&P 500 gained 0.8%, finishing at 6,134.63
– The Nasdaq Composite advanced 1.1%, ending at 20,028.91
The market’s resilience in the face of mixed economic data highlights investors’ growing optimism about the trajectory of inflation and potential interest rate cuts later in the year.
Inflation Data and Fed Expectations
The U.S. Labor Department reported that the Producer Price Index increased by 0.4% in January, above economists’ consensus of 0.2%. However, the core PPI, which excludes volatile food and energy prices, rose 0.3%, in line with expectations.
Despite the headline PPI coming in hotter than anticipated, market participants found solace in certain components of the report. Bill Adams, chief economist for Comerica Bank, noted, “The PPI report was hot, but probably lifted by temporary factors and residual seasonality. It also saw flat or negative readings on most types of healthcare services, which points to a cooler core PCE inflation report for January than the month’s core CPI.”
This interpretation led to a decline in Treasury yields, with the 10-year yield falling more than 10 basis points to 4.531%, erasing the previous day’s CPI-related jump.
Tech Sector Leads the Charge
The technology sector was a significant driver of Thursday’s gains, with several big names posting notable increases:
– Nvidia (NVDA) gained about 3% after Hewlett Packard Enterprise announced it had shipped its first solution using Nvidia’s Blackwell chip.
– Tesla (TSLA) rose more than 4%, although shares remain near a three-month low.
– AppLovin (APP), last year’s best-performing U.S. tech stock, soared by roughly 20% following strong earnings.
Other tech giants like Apple (AAPL), Microsoft (MSFT), Alphabet (GOOG), Amazon (AMZN), and Meta Platforms (META) saw modest gains, contributing to the overall market strength.
Notable Stock Movements
Several companies made significant moves based on earnings reports and corporate news:
– MGM Resorts International (MGM) jumped 15.6% after beating fourth-quarter profit and revenue estimates, citing strong growth in China and positive trends in Las Vegas.
– Cisco Systems (CSCO) shares rose after the networking equipment maker beat quarterly earnings estimates and raised its full-year outlook.
– Reddit (RDDT) shares fell due to disappointing user growth, despite beating revenue expectations.
– Deere & Company (DE) slid after reporting quarterly sales well below estimates.
Upcoming Market Events
Investors are closely watching several key events that could impact market sentiment in the coming days:
1. President Trump’s Tariff Announcement: The market is anticipating details about President Trump’s plan to impose reciprocal tariffs on all goods from countries that tax U.S. imports. This announcement could have significant implications for global trade relations.
2. Federal Reserve’s Next Move: While the Fed is not expected to cut rates until September, traders are closely monitoring economic data for clues about the timing and extent of potential rate cuts in 2025.
3. Earnings Season Continuation: With several major companies still set to report, earnings releases will continue to influence individual stock movements and overall market sentiment.
As the market navigates through these events and digests new economic data, volatility may persist. However, the current trend suggests that investors remain cautiously optimistic about the economic outlook and corporate performance in 2025.
