Dow jumps 342 points after tariff updates and inflation data ease concerns, while Tech stocks
On Thursday, stocks gained as inflation data and US tariff updates helped ease concerns over economic pressures and global trade tensions, according to CNBC.
The Dow Jones Industrial Average climbed 342.87 points, or 0.77 percent, reaching 44,711.43. The S&P 500 increased by 1.04 percent to 6,115.07, while the Nasdaq Composite advanced 1.50 percent, closing at 19,945.64.
Markets reacted to President Donald Trump’s decision to sign a presidential memorandum to examine reciprocal tariffs on foreign nations. Despite hinting at major trade policy changes earlier in the week, he did not impose new levies.
However, Trump indicated that additional tariffs, including on auto imports, may be introduced, Reuters reported.
Technology stocks contributed to the market’s rally.
Nvidia rose 3.2 percent after Hewlett Packard Enterprise announced it had shipped its first solution using Nvidia’s Blackwell chip. AppLovin, which was last year’s top-performing US tech stock, surged 24 percent after releasing earnings. Tesla saw a 5.9 percent increase.
Investors also responded to new inflation data.
The producer price index (PPI), which measures prices producers receive for goods and services, rose 0.4 percent in January, exceeding the Dow Jones consensus estimate of 0.3 percent. Core PPI, which excludes food and energy, increased by 0.3 percent, matching expectations.
Although PPI showed a stronger increase, both this report and Wednesday’s consumer price index data suggested that the personal consumption expenditures (PCE) price index, scheduled for release in February, may be softer than anticipated. The Federal Reserve closely watches this measure.
The 10-year Treasury yield declined about 10 basis points to 4.531 percent after the inflation data was released.
“The components that feed into PCE is, I think, where we’re getting the celebration today. That’s helping bring yields down a little bit as well,” said Adam Turnquist, chief technical strategist at LPL Financial.
“We’re watching 4.5 percent as the line in the sand for this upturn that’s been in place since September. A break below that would be a welcome sign for equity markets,” he added.
Wall Street’s gains followed a volatile session on Wednesday. Higher-than-expected consumer price data tempered expectations for an interest rate cut, pushing forecasts to September.
At the same time, investors remain cautious as global trade tensions continue.
Additionally, the US dollar remained near a one-week high against the Japanese yen following stronger-than-anticipated consumer prices data.
The US experienced a significant rise in consumer prices in January, increasing the likelihood that the Federal Reserve will keep interest rates elevated for a longer period.
Meanwhile, the euro gained support due to news of potential peace talks between the US and Russia regarding the ongoing war in Ukraine.
