Key Market Updates

• DuPont stock rises 4.8% after raising its 2025 profit forecast.
• Elliott Investment builds a $2.5 billion stake in Phillips 66.
• Major indexes decline:
  • Dow Jones: -0.24%
  • S&P 500: -0.24%
  • Nasdaq Composite: -0.28%

Stock Market Trends: Powell’s Testimony and Inflation Data in Focus

Wall Street saw losses on Tuesday as megacap stocks fell, with investors closely watching Federal Reserve Chair Jerome Powell’s testimony on tariffs and inflation.

The market is also anticipating January’s Consumer Price Index (CPI) report, which is set for release on Wednesday at 8:30 a.m. ET. The report could influence the Fed’s decision on interest rate cuts in 2024.

Interest Rate Expectations

• Traders predict at least one 25-basis-point rate cut this year.
• 60% chance of a second rate cut, according to LSEG data.
• Cleveland Fed President Beth Hammack signaled that the Fed will keep monetary policy on hold until inflation moves closer to target levels.

Trump’s Tariff Hike Boosts Steel Stocks

On Monday, Donald Trump announced new tariffs on steel and aluminum imports, effective March 4. This sent steel and aluminum stocks higher:

• Cleveland-Cliffs (CLF.N): +2.1%
• Steel Dynamics (STLD.O): +1.1%
• Century Aluminum (CENX.O): +9.9%

Trump also plans to introduce reciprocal tariffs on countries that impose duties on U.S. goods.

Tech Stocks Slide, Apple Rises on AI Partnership

Most tech and megacap stocks declined:

• Microsoft (MSFT.O), Meta (META.O), Tesla (TSLA.O): -0.4% to -0.9%.
• Apple (AAPL.O): +1% after reports that it’s partnering with Alibaba (9988.HK) to develop AI-powered iPhone features in China.

Stock Market Performance (Morning Update - 9:46 a.m. ET)

• Dow Jones: ↓ 0.24% (-108.74 points) to 44,361.67
• S&P 500: ↓ 0.24% (-14.79 points) to 6,051.65
• Nasdaq Composite: ↓ 0.28% (-55.41 points) to 19,658.86

Seven of the 11 S&P 500 sectors were down, led by utilities (-0.9%).

Biggest Stock Movers

• Phillips 66 (PSX.N) +3.8% – Activist hedge fund Elliott Investment Management acquired a $2.5 billion stake.
• DuPont (DD.N) +4.8% – Raised its 2025 profit forecast on strong demand.
• Coca-Cola (KO.N) +3.6% – Q4 revenue beat expectations, driven by higher prices and strong demand.
• Fidelity National Information Services (FIS.N) -16.1% – Issued lower-than-expected Q1 profit guidance.

Market Breadth and New Highs/Lows

• Declining stocks outpaced advancing stocks by:
  • 2.76-to-1 on the NYSE.
  • 2.27-to-1 on the Nasdaq.
• S&P 500: 4 new 52-week highs, 13 new lows.
• Nasdaq Composite: 18 new highs, 113 new lows.

Summary: Market Uncertainty Ahead of Powell’s Speech

Wall Street is facing pressure from declining megacap stocks as traders await Jerome Powell’s testimony and the January CPI inflation report. While steel and aluminum stocks surged following Trump’s new tariffs, tech stocks struggled, with Apple bucking the trend due to its Alibaba AI partnership.

Looking Ahead

• Powell’s testimony before the House Financial Services Committee on Wednesday could shape market sentiment.
• CPI inflation data will determine the likelihood of future Fed rate cuts.
• Trump’s tariff decisions could impact global trade and corporate earnings

Source: reuters.com, ChatGpt