U.S. stocks closed higher on Wednesday as investors considered President Trump’s recent 25% tariff proposals and analyzed the Federal Reserve minutes for indications regarding future monetary policy. The S&P 500 rose about 0.2%, reaching a new record high of 6,144.15, while the Nasdaq Composite and Dow Jones Industrial Average each gained approximately 0.1%.
U.S. stocks rise as investors weigh Trump’s tariff proposals
The Federal Reserve’s minutes from its January meeting indicated that most officials supported maintaining restrictive policy levels due to ongoing concerns about inflation. The minutes stated, “Many participants noted that the Committee could hold the policy rate at a restrictive level if the economy remained strong and inflation remained elevated.” However, they also mentioned potential easing if economic conditions weakened.
The committee expressed a need for further progress on inflation before making adjustments to the rates and highlighted “upside risks to the inflation outlook,” particularly in light of potential changes in trade and immigration policies. Trump’s rapidly evolving tariff strategies remain a significant focus for investors assessing their economic impact.
On Tuesday, Trump announced expected new tariffs on autos, chips, and pharmaceuticals, proposing a 25% tariff on all foreign automakers starting April 2. This followed last week’s announcement of global tariffs of the same percentage on steel and aluminum imports, effective March 12. Additionally, he ordered federal agencies to study reciprocal tariffs on trading partners, with further tariffs of 25% on Mexico and Canada anticipated next month, while 10% duties on China have already been instituted.
Major stock indices, including the S&P 500 and Dow Jones, continued their upward trend, buoyed by a robust trading week, showing gains alongside an almost record-high performance for the Dow and Nasdaq Composite. Mixed results were observed among major tech companies; Microsoft, Apple, Alphabet, Tesla, and Broadcom gained, while Nvidia, Amazon, and Meta Platforms experienced declines, marking Meta’s second consecutive day of losses following a 20-session winning streak.
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Super Micro Computer saw an 8% rise in shares, reflecting a rally from last week’s upbeat outlook for AI-driven sales growth, with stock jumping as much as 19% during the session. In contrast, Intel shares declined by 6% after a significant 16% surge the previous day, amid reports that the company may sell parts of its business.
Palantir shares decreased by 10%, following a report that the Trump administration directed the Pentagon to reduce the U.S. defense budget, which may adversely impact military contractors. The stock had previously hit record highs earlier in the day. In other notable market movements, shares of homebuilder Toll Bros and cloud networking company Arista Networks each fell around 6%, while specialty chemicals maker Celanese plunged 21% after revealing a quarterly loss.
The yield on 10-year Treasurys remained stable at 4.54%. The Federal Reserve indicated it is not hurrying to adjust the benchmark rate, reflecting apprehensions regarding persisting inflation and the implications of Trump’s economic policies. Bitcoin reached $96,500, up from an overnight low of approximately $94,000, while gold futures slightly declined to around $2,940 an ounce, with West Texas Intermediate crude oil futures rising by 0.6% to $72.25 a barrel.
Among the biggest movers, Garmin shares surged 12.6%, setting a new intraday record following strong quarterly sales reports across its fitness, auto, and outdoor segments. Microchip Technology increased by 9.9% after announcing an AI coding assistant. Analog Devices rose 9.7% after surpassing quarterly estimates, while Super Micro Computer added 8.0% to its streak following a promising revenue projection.
In comparison, Celanese suffered the largest drop of 21.4%, citing forecasts for continued operating losses. Axon Enterprises dipped 16.4% due to an analyst downgrade, and Cadence Design Systems dropped 8.8%, attributing this to a lower-than-expected revenue forecast, largely influenced by a slowdown in the automotive sector.
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