Last Updated: 4:13 PM EST
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Stock indices finished today’s trading session in the red after the White House said that Tariffs would begin on Saturday, with Mexico and Canada getting hit with 25% duties. At the same time, China will see a 10% tax. As a result, the Nasdaq 100 (NDX), the S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) fell 0.14%, 0.51%, and 0.75%, respectively.
Separately, earlier today, the Federal Reserve’s preferred inflation gauge showed prices increased in line with expectations in December, with inflation remaining above the Fed’s 2% target. The “core” Personal Consumption Expenditures (PCE) index, which excludes food and energy costs, rose 0.2% from the prior month, meeting Wall Street’s expectations.
Over the past year, core prices rose 2.8%, in line with expectations and unchanged from November. Overall PCE increased 2.6% on a yearly basis, a slight pickup from the 2.4% seen in November. These numbers come two days after the Federal Reserve paused its interest rate-cutting cycle.
The Fed appears to be waiting for more inflation data and clarity on President Trump’s potential tariff plans. Economists believe tariffs could keep inflation above the Fed’s target.
Indeed, Austan Goolsbee, President of the Federal Reserve Bank of Chicago, recently said that he is open to a more gradual approach to reducing interest rates but still believes rates should be lower in 12-18 months from now.
Goolsbee thinks the Fed is getting close to the “neutral rate” of interest, where the economy is balanced and not overheating or underperforming.
The latest inflation data has Goolsbee feeling optimistic that inflation will reach the Fed’s 2% target.
First Published: 3:52 AM EST
U.S. futures gained momentum on Friday, aided by Apple’s (AAPL) strong Q4 earnings report. Futures on the Nasdaq 100 (NDX), the Dow Jones Industrial Average (DJIA), and the S&P 500 (SPX) were up 0.7%, 0.19%, and 0.35%, respectively, at 3:36 a.m. EST, January 31.
In regular trading on Thursday, the S&P 500, the Dow Jones, and the Nasdaq Composite (NDAQ) gained 0.4%, 0.5%, and 0.3%, respectively. These gains come as chip and AI-related stocks recover from a recent sell-off triggered by concerns over advancements in AI technology in China.
Importantly, all three major indices are poised to close the January month in positive territory. The Dow Jones is up 5.5% month-to-date, while the S&P 500 and the Nasdaq Composite have gained 3.2% and 1.9%, respectively.
In major after-market action, AAPL stock gained 3% on better-than-expected Q4 results. Similarly, Intel (INTC) stock was up 3.7% after it beat analysts’ estimates for both Q4 earnings and revenue. Further, Atlassian (TEAM) stock soared 19.5% on providing strong guidance.
Looking ahead, investors are awaiting key economic data releases, such as the December personal consumption expenditures (PCE) price index, the Federal Reserve’s preferred measure of inflation. This data will provide crucial insights into the path of monetary policy.
In addition, the earnings season continues to unfold, with energy giants Chevron (CVX) and Exxon Mobil (XOM) set to report their results before the market opens. Other notable companies releasing their numbers today include AbbVie (ABBV), Colgate (CL), Phillips 66 (PSX), and Novartis (NVS).
Meanwhile, the U.S. 10-year treasury yield was up, floating near 4.541%. Simultaneously, WTI crude oil futures are trending higher, hovering near $72.85 per barrel as of the last check.
Elsewhere, European indices opened higher on Friday as investors digested several key earnings reports and the European Central Bank’s (ECB) decision to cut interest rates.
Japanese Market Ended Higher on Friday
Japanese indices closed in the green today as traders assessed a slew of positive economic reports from the country. Today, Japan’s Topix and Nikkei indices closed higher by 0.24% and 0.15%, respectively.
Investors should note that the China and Hong Kong stock markets were closed today for the Lunar New Year holidays.
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