Wall Street Holds Steady as Cisco Gains Offset Tariff Concerns/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ Wall Street remained steady Thursday, with the S&P 500 up 0.2% as Cisco Systems surged 4.9% on strong earnings. Investors braced for President Donald Trump’s upcoming tariff announcement, which could impact inflation and Fed rate decisions. While economic uncertainty lingers, better-than-expected corporate earnings from GE HealthCare, Molson Coors, and Robinhood Markets kept markets near record highs.
Stock Market Overview: Quick Look
- Market Performance: The S&P 500 rose 0.2%, the Nasdaq gained 0.5%, and the Dow Jones was up slightly.
- Cisco Leads Gains: The tech giant jumped 4.9% on strong AI-driven earnings.
- Earnings Boost: GE HealthCare (+5.5%), Molson Coors (+5.2%), and Robinhood (+16.4%) posted strong profits.
- Tariff Uncertainty: Trump’s potential tariff hikes could push inflation higher, affecting the Fed’s next move.
- Inflation Concerns Grow: Wholesale prices jumped 0.4%, reinforcing fears that rate cuts may be delayed.
Wall Street Holds Steady as Cisco Gains Offset Tariff Concerns
Deep Look: Wall Street Balances Earnings Wins & Tariff Uncertainty
Wall Street remained relatively stable Thursday as Cisco’s strong earnings report lifted investor sentiment, even as concerns over inflation and tariffs loomed.
The S&P 500 gained 0.2%, the Nasdaq rose 0.5%, and the Dow Jones edged up by 20 points in early trading.
Cisco, GE HealthCare & Robinhood Fuel Market Gains
Several major U.S. companies exceeded profit expectations, helping stocks stay near their record highs:
- Cisco Systems (+4.9%): Reported strong AI-driven product sales, boosting investor confidence.
- GE HealthCare (+5.5%): Factored Trump’s China tariffs into its 2025 outlook, yet still beat profit expectations.
- Molson Coors (+5.2%): Delivered higher-than-expected earnings, showing resilience in consumer spending.
- Robinhood Markets (+16.4%): Surged after posting its best financial quarter since going public.
Despite these gains, Deere & Co. tumbled 3.4% after reporting a 50% drop in quarterly profit, citing weaker farm equipment demand.
Trump’s Tariff Plan Raises Inflation Worries
Investors remain on edge ahead of Trump’s expected announcement on tariffs. The president is set to unveil a plan that matches U.S. import duties to the rates charged by other countries, a move that could increase costs for businesses and consumers.
- Why It Matters: Higher tariffs could push inflation higher, making it harder for the Federal Reserve to cut interest rates.
- Wall Street’s View: Some investors believe Trump may use tariff threats as a negotiation tactic, similar to how he paused a 25% tariff on Canada and Mexico for 30 days.
- What’s Already Happening: Trump has already imposed a 10% tariff on Chinese goods, affecting multiple industries.
Fed’s Rate Cut Plans in Question
Thursday’s hotter-than-expected wholesale inflation report added more uncertainty to the Federal Reserve’s plans:
- Producer Price Index (PPI) rose 0.4% in January, up 3.5% year-over-year.
- Consumer inflation also rose 3%, making it the fourth straight month of rising prices.
- Wall Street now expects fewer Fed rate cuts in 2025, with one possible cut delayed until October.
Bonds & Global Markets
- Treasury yields fell, with the 10-year Treasury yield dropping to 4.55% from 4.63%.
- Asian and European markets were mixed, with Japan’s Nikkei 225 gaining 1.3% after Honda, Nissan, and Mitsubishi ended merger talks.
What’s Next?
- Trump’s tariff announcement at today’s press conference could shake markets if the details are harsher than expected.
- Investors will watch Fed signals on how inflation data affects rate cut expectations.
- Earnings season continues, with companies adjusting forecasts based on economic uncertainty.
With Wall Street balancing strong corporate earnings and trade policy risks, investors remain cautious but optimistic heading into the second half of February.
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