Stock Market Recap: Tariffs, Tech, and Fed Chair Powell’s Testimony Shape Trading Day
Market Performance: Mixed Results Amid Tariff Concerns
On Tuesday, February 11, 2025, U.S. stock markets closed with mixed results as investors grappled with the implications of newly imposed tariffs and anticipated Federal Reserve Chair Jerome Powell’s congressional testimony. The Dow Jones Industrial Average shed 108.74 points, or 0.24%, closing at 44,361.67. The S&P 500 mirrored this decline, losing 14.79 points, or 0.24%, to end at 6,051.65. The tech-heavy Nasdaq Composite experienced a slightly steeper drop, falling 55.41 points, or 0.28%, to finish at 19,658.86.
Tariffs Take Center Stage
President Donald Trump’s decision to impose 25% tariffs on steel and aluminum imports, set to take effect on March 4, 2025, dominated market sentiment. This move sparked concerns about potential inflationary pressures and global trade tensions. Notably, American steelmakers like Cleveland-Cliffs (CLF) and Steel Dynamics (STLD) saw their shares rise for a second consecutive day, benefiting from the protectionist measures.
Tech Sector: A Mixed Bag
The technology sector presented a mixed picture. While most megacap stocks experienced declines, Apple (AAPL) bucked the trend, gaining about 1% following reports of a partnership with Alibaba (BABA) to develop AI features for iPhone users in China. Other tech giants like Microsoft (MSFT), Meta (META), and Tesla (TSLA) saw their shares dip between 0.4% and 0.9%.
Earnings Season Highlights
Several major companies reported earnings, influencing individual stock performances:
1. Coca-Cola (KO) shares surged 3.6% after beating fourth-quarter revenue estimates, driven by higher prices and resilient demand.
2. DuPont de Nemours (DD) gained 4.8% after raising its 2025 profit forecast on strong demand for electronics.
3. Shopify (SHOP) rose 5% after topping analyst estimates.
4. Astera Labs (ALAB), an AI chipmaker, remained relatively unchanged despite surpassing earnings expectations.
Upcoming Market Events
Investors are closely watching two critical events that could significantly impact market direction:
1. Federal Reserve Chair Jerome Powell’s Testimony: Powell is set to deliver his semiannual monetary policy testimony before the Senate Banking Committee on February 11 and the House Financial Services Committee on February 12. Markets are eager for insights on the Fed’s stance on interest rates and inflation, especially in light of the new tariffs.
2. Consumer Price Index (CPI) Data: The January CPI reading, scheduled for release on February 12, will provide crucial information on inflation trends. This data could influence the Fed’s future policy decisions.
Other Notable Market Moves
– Phillips 66 (PSX) shares climbed 3.8% after activist investor Elliott Investment Management disclosed a $2.5 billion stake in the oil refiner.
– Fidelity National Information Services (FIS) dropped 16.1% following a lower-than-expected first-quarter profit forecast.
– The utilities sector led losses among S&P 500 sectors, falling 0.9%.
Looking Ahead: Market Expectations
As of February 11, traders are pricing in at least one 25-basis-point interest rate cut from the Fed this year, with a 60% probability of an additional reduction of the same magnitude. However, Cleveland Fed President Beth Hammack suggested that the need to control inflation might keep monetary policy on hold for now.
The market remains sensitive to inflation data, trade policy developments, and central bank communications. Investors will be parsing Powell’s testimony and the upcoming CPI report for clues on the economic outlook and potential policy shifts that could affect market dynamics in the coming months.
In conclusion, while the stock market showed resilience in the face of new tariffs and mixed corporate earnings, uncertainties surrounding trade policy and monetary policy continue to shape investor sentiment. As always, market participants are advised to stay informed and maintain a diversified portfolio in these dynamic economic conditions.
