4:15pm: Wall Street ends higher
Major US stock indexes closed higher despite ongoing concerns about potential tariffs.
The Nasdaq jumped 191 points or 1% to finish at 19,7147. The S&P 500 rose 40 points or 0.7% to end at 6,066, while the Dow Jones Industrial Average added 167 points or 0.4% to close at 44,4708.
Tech stocks outperformed, helping drive the broader market higher as investors appeared to look past the latest U.S. tariff threats.
Monday’s rally comes after a challenging session on Friday, where all three major indexes closed sharply lower due to tariff concerns and mixed labor market data. Today's gains suggest a potential shift in investor sentiment, with markets showing resilience in the face of ongoing economic and geopolitical uncertainties.
3:30pm: USD rises
As the US's largest trade partners waited to hear confirmation, the US dollar rose for a third consecutive session on Monday as President Donald Trump warned of more tariffs, including a 25% duty on steel and aluminum imports, expected to be announced soon.
Despite concerns over additional trade measures, global stocks advanced.
Trump also plans to reset US import taxes to match those of other countries, adding to existing tariffs on China and potential duties on Canada and Mexico.
The move raises inflation risks, but Trump argues the tariffs will boost U.S. manufacturing and create a fairer trade environment.
2:30pm: Tariffs could increase inflation, analysts warn
What would reciprocal and steel/aluminum tariffs mean for inflation?
It's a question posited by Deutsche Bank analysts on Monday in response to new Trump threats to impose 25% tariffs on aluminium and steel.
"If sustained, these tariffs could increase core PCE in 2025 by an additional 30-40bps, depending on the ultimate passthrough to consumer prices. If the delayed Canada and Mexico tariffs were to ultimately go into effect as well, inflation in 2025 could be above 3.5%, though the tariffs would have limited impact beyond this year," analysts suggested.
The tariffs represent additional upside risks to the inflation outlook for the Fed, according to DB.
"While our baseline is that they would prefer to “look through” the price level impact by keeping rates steady, their ability to do so could be constrained if inflation expectations begin to rise and / or the labor market reemerges as an additional source of inflationary pressure. Recent data suggest both these outcomes cannot be fully discounted."
12:50pm: Rally slows but still strong
Technology stocks continued leading the way by midday Monday.
The Nasdaq is outperforming other major indices, up 1% in today's trading session. This surge is primarily driven by gains in mega-cap tech names and a rally in semiconductor stocks, which are rebounding from their January selloff.
The S&P 500 is also in positive territory, rising 0.5%. The index's gains are supported by strong performance in the technology and consumer discretionary sectors.
Meanwhile, the Dow is showing more modest gains, up 0.1%. The blue-chip index's performance is being tempered by declines in some of its components, including Merck, Dow, and Coca-Cola.
Traders appear to be shrugging off the latest tariff threats from President Trump and are instead focusing on upcoming inflation data.
11:55am: Stocks rise despite new tariff threats
Stocks have largely ignored the concerns from last week and, driven by major tech stocks, have started the week on a strong note, according to Chris Beauchamp, Chief Market Analyst at online trading platform IG.
“Had an investor just woken up from a month asleep, it would seem that there wasn’t much to worry global markets right now. Friday’s inflation panic and tariff jitters have been entirely forgotten over the weekend," Beauchamp noted.
"This Monday is very different from its two predecessors."
11:05am: Week ahead
Wall Street’s attention will once again turn to Washington this week as Federal Reserve Chair Jerome Powell prepares to deliver his semi-annual monetary policy testimony before Congress.
The Fed Chair will speak to Congress on Tuesday, followed by the House Financial Services Committee on Wednesday.
Meanwhile, the latest inflation figures will be a critical test of the Fed’s patience. Economists expect January’s headline CPI to rise 0.31% on a monthly basis, keeping the annual rate steady at 2.9%. Core CPI, which excludes food and energy, is projected to increase 0.28%, leaving the year-over-year rate at 3.1%.
Beyond inflation, several key economic reports this week will offer an early look at first-quarter growth. Friday’s retail sales report is expected to show a sharp decline of 0.8%, largely due to weak auto sales.
9.55am: Nasdaq and McDonald's lead Street gains
As expected the Nasdaq tech stocks have led the early gains on Wall Street on Monday.
The tech-powered exchange's Composite index rose 0.8% in early trading, led by gains for Super Micro Computer Inc, Adobe, Constellation Energy, PDD, MongoDB and Nvidia.
Elsewhere, the S&P 500 climbed 0.45% and the Dow Jones 0.3%, with the small- and mid-cap Russell 2000 up 0.2%.
McDonald's Corp (NYSE:MCD, ETR:MDO) topped the Dow risers, climbing despite revenues and earnings marginally missing analyst forecasts, but same-store sales edged 0.4% higher, while analysts had predicted a decline
Many on the Street hope the fourth quarter results are the "low point in recent history for the brand," Citi analysts wrote.
7.15am: Nasdaq and steel stocks to lead Wall St higher
US stocks are set to head higher on Monday, reversing some of the losses from the end of last week, led by tech stocks and steel bashers.
Ahead of the opening bell, Nasdaq 100 futures were up 0.6%, while those for the S&P 500 were pointing to gains of 0.4% and those for the Dow Jones just under 0.3%.
After Donald Trump announced plans for new tariffs on steel and aluminum imports, companies making pre-market gains included several steel-makers.
Nucor Corp, a steel manufacturer and recycler, was up 9.6% pre-market; along with Cleveland-Cliffs, Reliance, Steel Dynamics, United States Steel and Alcoa.
The President said on an Air Force One flight on Sunday that he would officially announce a 25% tariff on all steel and aluminium imports into the United States this week.
Trump also stated that reciprocal tariffs would be introduced on any country that taxes US imports, though he did not specify which nations would be targeted or if any exemptions would apply.
In other company news, there were reports that ChatGPT developer OpenAI is close to producing a new microchip with Taiwan Semiconductor Manufacturing Co to circumvent Nvidia Corp or at least strengthen its hand in supply contract negotiations.
Elsewhere, Rockwell Automation jumped 9% pre-market after the industrial automation company posted earnings that were better than expected.
Looking ahead to macroeconomic news, fresh from the strong non-farm payrolls report, which sent stocks lower, today brings the NY Fed inflation expectations series, as a taster before US consumer prices on Wednesday.
The CPI release will be preceded by Fed chief Jerome Powell's semi-annual monetary policy testimony before the Senate Banking Committee tomorrow and then after that potentially market-moving print, Powell will be quizzed by the House Financial Services Committee.
Elsewhere, the week ends with retail sales and industrial production.
"With US Treasuries having made losses at the end of last week in response to a stronger-than-expected labour market report, all eyes will be on Fed Chair Powell’s semi-annual Congressional testimony," said analysts at Daiwa, "as well as the January CPI and PPI inflation data (Wednesday and Thursday)."
Most notably, Daiwa's US economists expect core CPI to rise broadly in line with the average of the past year of around 0.3% month-over-month, which would take the annual rate down to 3.1%, the softest reading since April 2021.