Investing.com-- The S&P 500 closed higher Thursday after President Donald Trump signed an order to explore reciprocal tariffs on U.S. trading partners, but stopped of implementing the measures immediately as some had feared.
At 4:00 p.m ET (21:00 GMT), the Dow Jones Industrial Average rose 342 points, or 0.8%, the S&P 500 index climbed 1%, and the NASDAQ Composite rose 1.5%.
Trump signs order to explore reciprocal tariffs
Trump signed order to explore how the U.S. can match the levies and rates imposed by other nations on imported U.S. goods, though stopped short of imposing them immediately.
While Trump had teed up the news that tariffs would be announced today, some feared the measures could go into effect immediately.
Stocks rallied as the delay could provide time for countries to negotiate with the U.S. on tariffs.
Nvidia gains on Blackwell optimism to lead tech higher
NVIDIA Corporation (NASDAQ:NVDA) climbed more than 3% after Hewlett Packard Enterprise shipped its first Nvidia AI computing Blackwell system.
The news comes as some on Wall Street warned of growing pains for Nvidia’s latest chip roll out, which had been delayed by glitches.
Nvidia is set to report results on Feb. 26.
PPI points to inflationary pressures
However, investors are also having to cope with lingering inflationary pressures in the world’s largest economy.
Headline U.S. producer prices increased at a hotter-than-anticipated pace in January, with the producer price index (PPI) for final demand rising 0.4% on a month-on-month basis, data from the Labor Department showed on Thursday. Economists had predicted a PPI reading of 0.3%.
In the twelve months through January, the PPI grew by 3.5%, compared with 3.5% in the preceding month and expectations of 3.2%.
"A hotter-than-expected producer price report on the heels of yesterday’s rise in the CPI report reinforces concerns of ingrained inflationary pressures in the economy and further upside price risks given an aggressive fiscal policy agenda," Stifel said in a recent note.
Recent indications of sticky inflation, particularly consumer price data released on Wednesday, have weighed on expectations that the U.S. central bank will resume a series of rate reductions it paused last month,
Fed officials have argued that a wait-and-see approach to future policy decisions is warranted due in part to price growth remaining above their 2% target level, as well as broader resilience in the American economy.
Federal Reserve Chair Jerome Powell said in a testimony before Congress earlier this week that the central bank will have to wait until it was clear inflation was moving towards its 2% goal before cutting rates further. The Fed had slashed rates by 1% through 2024.
Trump has also vowed to bring down high inflation, which he blames on the Biden administration. But analysts and Fed officials have cautioned that his agenda of trade tariffs - which will be paid by U.S. importers - could underpin inflation in the coming months.
Trump this week approved 25% tariffs on steel and aluminum imports. He also flagged the potential for reciprocal tariffs against major U.S. trading partners.
Earnings continue to flow
This quarterly earnings season has been a generally productive one. Over two-thirds of S&P 500-listed firms have already posted results, and nearly 77% have surpassed Wall Street expectations, according to FactSet.
There are more companies due to report Thursday, including home rental company Airbnb (NASDAQ:ABNB), cryptocurrency exchange Coinbase Global (NASDAQ:COIN) and cybersecurity company Palo Alto Networks (NASDAQ:PANW) after the close.
Elsewhere, Cisco Systems (NASDAQ:CSCO) stock gained 2% after the technology conglomerate lifted its annual revenue guidance thanks in large part to artificial intelligence-fueled demand for its cloud networking gear.
Robinhood Markets (NASDAQ:HOOD) stock gained 14% after the cryptocurrency trading platform reported record fourth-quarter revenue and profit on the back of a resurgence in retail trading.
Dutch Bros (NYSE:BROS) stock surged 29% after the coffee chain reported stronger-than-expected earnings and same-store sales that surpassed expectations.
Crocs (NASDAQ:CROX) stock gained 24% after the footwear company reported better-than-anticipated income in the fourth quarter, boosted by demand in North America and accelerating growth in China.
On the flip side, Reddit (NYSE:RDDT) stock slumped nearly 5% after the social media platform’s daily active unique visitors in the fourth quarter missed expectations, with CEO Steve Huffman citing changes in Google’s (NASDAQ:GOOGL) search algorithm that impacted the number of users coming to the website.
Deere & Company (NYSE:DE) stock fell 2.2% after the agricultural equipment maker reported a 50% drop in net income in its fiscal first quarter as it grapples with inventory issues and broader market uncertainty.
(Peter Nurse, Ambar Warrick contributed to this article.)