Traders work on the floor of the New York Stock Exchange on Feb. 4, 2025.
NYSE
Stocks were little changed on Tuesday as investors digested cautious commentary from Federal Reserve Chairman Jerome Powell on interest rates. Concerns remain over the direction of the economy amid U.S. tariffs and the possible escalation of a global trade war.
The Dow Jones Industrial Average hovered just above the flatline. The S&P 500 and Nasdaq Composite were also trading near flat.
Apple gained more than 2% on a report that the company is partnering with Alibaba to develop AI features for iPhone users in China, curbing the market’s losses. Coca-Cola also jumped 3% on a strong earnings report.
Powell earlier addressed the Senate Banking Committee and signaled the Fed does not need to move quickly to ease monetary policy.
“With our policy stance now significantly less restrictive than it had been and the economy remaining strong, we do not need to be in a hurry to adjust our policy stance,” Powell said in his first of two appearances this week on Capitol Hill. The central bank leader called the economy “strong overall” with a “solid” labor market, and said inflation is easing but remains above the Fed’s 2% goal.
Powell’s testimony — which will be followed by his appearance before the House Financial Services Committee on Wednesday — comes at a volatile time in Washington with President Donald Trump favoring tariffs against U.S. trading partners and with mixed messages coming from the administration on its approach to the Fed.
Trump on Monday signed new tariffs on all steel and aluminum imports to the U.S. The European Union responded by saying it would retaliate with levies of its own if the U.S. tacks on tariffs against products from the country bloc. The President previously said he would demand lower interest rates, but Treasury Secretary Scott Bessent said last week that the White House would not be pressuring the Fed to cut its benchmark borrowing rate and instead will be looking for the 10-year Treasury yield to fall as the administration institutes deregulation and spending cuts to control inflation.
“Not only is it difficult to estimate the true impact of the new tariffs already announced, but it is even more challenging to project the fallout from what additional levies might be coming in the near-term,” wrote Ian Lyngen, head of U.S. rates strategy at BMO.
Investors are looking ahead to fresh inflation data in the form of the latest consumer price index report due out Wednesday, while the producer price index will go out on Thursday.
