US stocks climb as traders sift tariff news, look to Fed minutes
U.S. equities inched higher as traders continued to assess the constant stream of tariff news and waited for potential insight on rate trajectories from the Federal Reserve’s meeting minutes.
The S&P 500 Index rose 0.61% by close in New York, with six of the 11 sectors in green, and advances led by communication services and utilities. The Nasdaq 100 climbed 0.94%, and the Dow Jones Industrial Average advanced 0.49%. All are well off session highs hit earlier in the day. The Dow is whiskers away from touching an all-time high, for the first time since early December.
Among individual stocks, Nvidia Corp. became the first company in history to achieve a $4 trillion market valuation. Microsoft Corp. rose after Oppenheimer upgraded it, citing potential upside as artificial intelligence revenue grows quickly. Aehr Test Systems sank 20% after the maker of semiconductor equipment posted quarterly revenue that slipped from the year-ago period. Mobileye Global Inc., the maker of software and hardware technology for automobiles, announced a secondary offering by Intel.
Markets have been on edge as President Donald Trump’s 90-day tariff deadline came and went Wednesday with little progress on trade deals. Trump on unveiled a new round of demand letters, saying he would levy a 30% rate on Algeria, Libya and Iraq, with 25% duties on products from Brunei and Moldova and a 20% rate on goods from the Philippines, presumably effective Aug. 1.
Adding to uncertainty is Trump and his administration’s unprecedented pressure on the Fed to cut interest rates, even though the economy and labor market remain robust and the threat of higher prices from tariffs looms.
“Even with the perceived tariff uncertainty, the potential for at least two Fed funds rate cuts later this year are providing support for stocks along with several major investment banks and brokerage firms increasing their year-end S&P 500 price targets,” said Ivan Feinseth, chief investment officer at Tigress Financial Partners.
On Tuesday, the president vowed to push forward with his aggressive tariff regime, and said he would not offer extensions on country-specific levies beyond the many that he has afforded. He also sowed fresh chaos in metals markets by indicating the U.S. would implement a higher-than-expected 50% tariff on copper imports, spurring a record spike in New York futures and a drop in the global benchmark.
Oil prices fell as a large gain in U.S. crude stockpiles undermined comments by the United Arab Emirates and Saudi Arabia about tight market conditions. Energy stocks dropped, with Baker Hughes Co., Texas Pacific Land Corp. and Devon Energy Corp. leading the S&P 500 Energy Index lower.
Meanwhile, investors are finding support from major Wall Street strategists who are raising their forecasts for the year, as well as equity positioning that leaves room for the rally to run further.
On Tuesday, strategists at both Goldman Sachs Group Inc. and Bank of America Corp. raised their target for the S&P 500. Goldman said it expected the Fed to act sooner to cut interest rates, while BofA said it is “dangerous to underestimate Corporate America.”
A BNP Paribas measure of equity positioning among investors including commodity-trading advisors, volatility-target funds and hedge funds has been steadily rising and sits at just above neutral. The limited exposure suggests there is room for stocks to rise should investors decide to pile in after tariff chaos pushed them to the sidelines earlier this year, the bank’s strategists said.