Both the S&P 500 ETF (SPY) and the Nasdaq 100 ETF (QQQ) closed higher on Tuesday as tech stocks mounted a partial recovery from Monday’s steep selloff.
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Advanced Micro Devices (AMD), Intel (INTC), Salesforce (CRM), and Qualcomm (QCOM) all finished with gains of at least 3%. Consumer cyclicals were also a bright spot, with both Amazon (AMZN) and Tesla (TSLA) closing in the green.
Following the Supreme Court ruling last week that barred sweeping tariffs under the International Emergency Economic Powers Act (IEEPA), President Trump announced a global 15% tariff using Section 122 of the Trade Act of 1974. However, the duties went into effect today with a lower rate of 10%. An administration official told Reuters that Trump hasn’t had a “change of heart” and that the White House is working on raising the rate to 15%, although details about a timeline weren’t provided.
The 10% tariffs lower the average U.S. import rate to 10.2% from 13.6% before the SCOTUS ruling, according to Bloomberg. A higher 15% tariff would increase the average rate to 12.1%.
Meanwhile, consumer confidence surprised to the upside after The Conference Board (TCB) announced that February’s Consumer Confidence Index (CCI) increased by 2.2 points to 91.2, topping the consensus estimate of 87.1. In addition, TCB revised January’s figure to 89 from 84.5, the lowest level since May 2014. The higher confidence was driven by stronger expectations for future labor market and business conditions.
“Four of five components of the Index firmed,” said TCB Chief Economist Dana M. Peterson. “Nonetheless, the measure remained well below the four-year peak achieved in November 2024 (112.8).”
Higher prices are still a key concern for both consumers and the Fed. Federal Reserve Bank of Chicago President Austan Goolsbee emphasized on Tuesday that interest rates should remain unchanged until inflation falls to the central bank’s target of 2%. The most recent core Personal Consumption Expenditures (PCE) Index, which is the Fed’s preferred inflation gauge, showed annual growth of 3% in December. “Before we cut rates more to stimulate the economy, let’s be sure inflation is heading back to 2%,” said Goolsbee.
This evening, Trump will take center stage at the State of the Union, which will begin at 9 p.m. Eastern Time. His address will cover trade, lower drug costs, and economic policies, according to Fox News.
The S&P 500 (SPX) closed with a 0.77% gain, while the Nasdaq 100 (NDX) returned 1.09%.