US Stocks Get Tech Lift As Traders Look Past Tariffs: Markets Wrap
Equity traders looked past tariff angst to send the S&P 500 higher after two days of losses.
A rally in several big techs spurred a rebound in stocks, with Nvidia Corp. briefly hitting $4 trillion - the first company in history to achieve that milestone. Treasuries rose before a $39 billion US bond sale and minutes from last month’s Federal Reserve meeting. The dollar wavered.
Equity traders looked past tariff angst to send the S&P 500 higher after two days of losses. While most shares in the US benchmark fell, a gauge of megacaps added 1% as the giant chipmaker extended this year’s surge to over 20%. Microsoft Corp. climbed on an analyst upgrade. Apple Inc. fell as White House trade counselor Peter Navarro told Fox Business the iPhone maker thinks it is “too big to tariff.”
"We believe the setup for equity markets looks bullish, even in light of renewed trade-war jitters,” said Craig Johnson at Piper Sandler. “While equities may come under some near-term pressure, investors are increasingly becoming numb to the tariff headlines and instead focusing on the trendlines."
President Donald Trump unveiled a new round of tariff demand letters on Wednesday with levies set to hit in August on imported goods from partners who fail to reach agreements with the US.
Trump said 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. The levies were largely in line with rates Trump had initially announced in April, though Iraq’s duties are down from 39%, while the Philippines rose from 17%.
Treasury 10-year yields declined two basis points to 4.38% before a sale of the maturity, the second in a trio of auctions that will culminate in an offer of longer-term debt Thursday. Trump posted on social media that the Federal Reserve’s rate is “at least 3 points too high,” while reiterating his call for lower borrowing costs.
“Optimism is growing that the Federal Reserve could begin cutting interest rates as early as September, particularly if upcoming data shows inflation is softening,” said Fawad Razaqzada at City Index. “But this is not a given as Trump’s policies could ramp up inflation in the coming months, which would lessen the need to loosen policy aggressively.”
Meantime, Nvidia’s surge to the new milestone marked a stunning rebound following a rough start to the year, when spending fears sparked by China’s DeepSeek, along with Trump’s trade war, weighed on risk sentiment. The stock is up more than 1,000% since the beginning of 2023. The latest catalyst has been a commitment to AI spending from its biggest customers.
Just this week, Goldman Sachs Group Inc. strategists raised their outlook for US stocks, citing among other factors the continued strength in the largest US companies as reasons why stocks are likely to keep heading higher.
“The US stock market now reflects a high degree of optimism about the rest of the year,” said Anthony Saglimbene at Ameriprise. “If the script goes as planned and economic activity remains firm, corporate profitability remains solid (especially across tech), and the inevitable unexpected speed bumps in the road don’t throw the market off track too much, stocks have an opportunity to grind higher through year-end.”
Yet Saglimbene remarks there’s now an elevated risk of disappointment, “especially after seeing how quickly the overall investment narrative can change based on the constant barrage of White House announcements.”
Corporate News:
Microsoft Corp. was upgraded at Oppenheimer on Wednesday, adding to a growing consensus on Wall Street that the software giant is in a strong position within artificial intelligence.
Apple Inc. should acquire Perplexity AI Inc. to improve its AI offerings, Wedbush says, calling the move a “no brainer” after the iPhone maker hit stumbling blocks in its effort to develop products internally.
Linda Yaccarino, who was hired two years ago by Elon Musk as chief executive officer of X, is stepping down less than three months after the social-media platform was absorbed by Musk’s artificial intelligence startup.
Samsung Electronics Co. introduced three new foldable smartphones in an effort to cement its grip on the category and broaden mainstream appeal before Apple Inc. debuts its first version next year.
CoreWeave Inc., a cloud computing provider, said it would offer Nvidia’s RTX PRO 6000 Blackwell GPUs at scale.
Merck & Co. agreed to buy respiratory drugmaker Verona Pharma Plc for around $10 billion as part of its ongoing search for ways to fill the Keytruda-sized hole that will emerge over the next few years.
Meta Platforms Inc. bought a minority stake in the world’s largest eyewear manufacturer, EssilorLuxottica SA, deepening the US tech giant’s commitment to the fast-growing smart glasses industry, according to people familiar with the matter.
Starbucks Corp. has received proposals from prospective investors in its China business, most of whom are eyeing a controlling stake in the operation, said people familiar with the matter.
AES Corp., which provides renewable power to tech giants such as Microsoft Corp., is exploring options including a potential sale amid takeover interest, people with knowledge of the matter said.
JM Smucker Co. was raised to outperform at BNP Paribas Exane, which said that while earnings upside has been difficult to find in the packaged-food segment lately, better-than-expected performance from coffee is “stimulating upside” potential for the company.
T-Mobile US Inc. was cut to underweight at KeyBanc Capital Markets, which said the telecom company’s stock underperformance is set to continue and that its “premium valuation is just too high.”
Hims & Hers Health Inc. plans to expand into Canada next year, timed with the anticipated availability of generic semaglutide.
Some of the main moves in markets:
Stocks
The S&P 500 rose 0.3% as of 11:44 a.m. New York time
The Nasdaq 100 rose 0.4%
The Dow Jones Industrial Average rose 0.2%
The Stoxx Europe 600 rose 0.8%
The MSCI World Index rose 0.4%
Bloomberg Magnificent 7 Total Return Index rose 1.1%
The Russell 2000 Index rose 0.3%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro fell 0.1% to $1.1708
The British pound was little changed at $1.3585
The Japanese yen was little changed at 146.49 per dollar
Cryptocurrencies
Bitcoin rose 0.2% to $108,882.29
Ether rose 2% to $2,650.73
Bonds
The yield on 10-year Treasuries declined three basis points to 4.37%
Germany’s 10-year yield declined two basis points to 2.67%
Britain’s 10-year yield declined two basis points to 4.61%
Commodities
West Texas Intermediate crude rose 0.4% to $68.59 a barrel
Spot gold rose 0.2% to $3,309.09 an ounce
