U.S. and World Markets March Ahead Overlooking Tariff Tantrums

Alexander Garcia
13 Feb, 2025
Miami

Benchmark indexes in New York edged higher as investors looked beyond two hotter-than-expected inflation reports released in as many days.

Positive earnings from leading companies have supported market enthusiasm, despite rising trade tensions and growing realization that the Fed is likely to delay rate cuts amid gathering inflationary forces. 

The S&P 500 index gained 0.5%, and the Nasdaq Composite advanced 0.9%, and the yield on 10-year Treasury notes remained elevated. 

Producer price inflation in January slowed from December, but the level was still ahead of market estimates.

Producer inflation slowed to 0.4% in January from the upwardly revised 0.5% in December, the U.S. Bureau of Labor Statistics reported Thursday. 

On an annual basis, producer price inflation was unchanged at 3.5%, matching the upwardly revised rate in December. 

Core inflation, which excludes food and energy inflation, advanced 0.3% from the previous month and gained 3.6% from a year ago.

Thursday's producer price inflation report follows Wednesday's hotter-than-expected consumer price inflation report, confirming that the Federal Reserve is not likely to lower interest rates anytime soon. 

Moreover, inflation is likely to remain elevated as the Trump administration doubles down on imposing more import taxes, or tariffs, on shipments from key trading partners in Europe, Asia, and North America.

 

U.S. Indexes and Treasury Yields

The S&P 500 index increased 0.1% to 6,059.56, the Nasdaq Composite edged up 0.3% to 19,710.78, and the Russell 2000 index was up 0.5% to 2,267.31.

The yield on 2-year Treasury notes edged lower to 4.36%, 10-year Treasury notes decreased to 4.56%, and 30-year Treasury bonds declined to 4.81%.

WTI crude oil decreased $0.71 to $70.65 a barrel, and natural gas prices edged higher by $0.13 to $3.69 a thermal unit.

Gold increased by $4.62 to $2,910.52 an ounce, and silver edged down by $0.24 to $32.03.

The dollar index, which weighs the US currency against a basket of foreign currencies, decreased 0.19 to 107.78 and traded at a two-year high.

 

U.S. Stock Movers

Dutch Bros Inc. soared 31% to $85.10 after the coffee chain operator reported better-than-expected quarterly results, and the company's full-year outlook was ahead of expectations.

The Trade Desk plunged 32% to $83.60 after the digital advertising company estimated weaker-than-expected results in the current quarter. 

Reddit, Inc. declined 7.8% to $199.87 after the social media platform operator reported weaker-than-expected quarterly results. 

MGM Resorts soared 13.5% to $39.0 after the casino company reported a 1% decline in consolidated revenue in the fourth quarter, but results were ahead of market expectations. 

 

European Markets Advanced, UK Q4 GDP Expanded, Eurozone Industrial Output Shrank 

Stock market indexes in Europe advanced, and investors reviewed the latest economic updates in the region. 

Benchmark indexes in Frankfurt traded at a new high, but market indexes in London fell after the release of GDP figures. 

Germany's consumer price inflation in January eased to an annual pace of 2.3% from an eleven-month high of 2.6% in December, according to the second estimate released by the Federal Statistical Office, or Destatis. 

Eurozone industrial output fell at an annual pace of 2.0% in December, following a revised 1.8% contraction in the previous month, Eurostat said in an update on Thursday. 

The UK economy unexpectedly expanded in the fourth quarter, driven by increases in activities in construction and services, the Office for National Statistics said Thursday. 

Gross domestic product increased 0.1% from the third quarter, when the economy was flat. 

On an annual basis, the UK economy expanded at a pace of 1.4%, compared to a 1.0% increase in the third quarter.

 

Europe Indexes and Yields

The DAX index increased by 0.8% to 22,317.80, the CAC-40 index edged higher 0.6% to 8,094.08, and the FTSE 100 index declined by 0.8% to 8,738.17. 

The yield on 10-year German bonds inched lower to 2.47%, French bonds decreased to 3.17%, the UK gilts moved up to 4.54%, and Italian bonds edged lower to 3.53%.

The euro increased to $1.04; the British pound was higher at $1.25; and the U.S. dollar was lower and traded at 91.81 Swiss cents.

Brent crude decreased $0.50 to $74.69 a barrel, and the Dutch TTF natural gas was higher by €0.17 to €49.91 per MWh.

 

Europe Stock Movers

Orange SA increased 2.7% to €11.04 after the French telecom carrier met targets it set for 2024. 

Delivery Hero SE jumped 8.3% to €28.43 after the German food delivery company's revenue increase in the fourth quarter surpassed market expectations. 

British American Tobacco declined 7.2% to 3,151.47 pence after the tobacco company reported mixed results. 

Barclays PLC decreased 5.4% to 291.10 pence, despite the British bank posting higher profit in the fiscal year 2024 and launching a £1 billion stock buyback.

 

Japan Indexes Extended Market Rally to Second Session

Stock market indexes in Tokyo advanced for the second session in a row, and the weaker yen boosted the outlook for earnings growth. 

The Nikkei 225 stock average jumped more than 1.3%, and the TOPIX advanced 1.2% after investors reviewed the latest batch of positive earnings. 

Market sentiment was boosted after the yen dropped below 154.55 against the dollar, making the Japanese assets more attractive to foreign investors and improving the profit outlook for the export-driven Japanese companies. 

 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average increased 1.3% to 39,461.47, and the TOPIX advanced 1.2% to 2,765.59. 

Financials, retailers, and advanced equipment makers led the gainers in Tokyo. 

Advantest Corp. increased 3.3% to ¥9,220.0, Tokyo Electron decreased 0.5% to ¥25,350.0, and Lasertec jumped 2% to ¥15,480.0. 

SoftBank Group decreased 3.5% to ¥9,504.0, and the high-tech investment company reported a loss in the December quarter, reflecting a slump in valuation in tech companies at its Vision Fund. 

Trend Micro soared 16% to ¥10,860.0 after a report suggested a heated takeover battle for the cybersecurity company. 

Bain Capital and Advent International are among the few of the several companies looking to acquire the Japan-based computer security company, according to a report by Reuters. 

Toray Industries jumped 8% to ¥1,020.0 after the composite materials maker reported nine-month financial results. 

Net income in the third quarter increased 17% from a year ago to 19.65 billion yen but fell short of market expectations. 

For the full year, the company retained a sales estimate of 2.6 trillion yen, net income of 88 billion yen, and a cash dividend of 18 yen per share.

 

DeepSeek-Driven Rally Lifts Hong Kong Tech Index to Five-Month High 

Stock market indexes in Hong Kong extended gains amid continued demand for tech stocks. 

The Hang Seng index advanced nearly 2%, but the mainland-focused CSI 300 index declined a fraction. 

The Hang Seng Tech Index advanced as much as 2.3% and surpassed the previous high reached in September when the central government and the PBOC announced a raft of stimulus measures. 

The current market euphoria is driven by the success of the open-access chatbot DeepSeek, which could make artificial intelligence tools more affordable. 

Leading tech Chinese companies are expected to include their artificial intelligence-driven tools in their services, which could spark another cycle of earnings growth. 

However, the tech enthusiasm in Hong Kong was not shared in trading in mainland China, as investors worried about tariff headwinds and lack of progress in implementing the previously announced stimulus measures. 

 

China Indexes and Stocks 

The Hang Seng index jumped 1.7% to 22,233.01, and the CSI 300 index decreased 0.3% to 3,908.72.

Alibaba Group jumped 1.4% to HK $115.40, Tencent Holdings advanced 1.6% to HK $458.80, JD.com Inc jumped 1.2% to HK $156.40, and SMIC advanced 0.3% to HK $48.10.