Market Volatility Persists as Trump Addresses World Economic Forum
The US stock market experienced a mixed day on Thursday, with investors closely watching President Donald Trump’s remarks at the World Economic Forum in Davos. The S&P 500 edged up 0.1%, while the Dow Jones Industrial Average rose 0.6%, nearing a record high. Meanwhile, the Nasdaq Composite fell 0.2% as tech stocks struggled to regain momentum.
Trump’s Trade Policy Takes Center Stage
In his remote speech at the World Economic Forum, President Trump emphasized the importance of making products in America, warning companies that they will have to pay tariffs if they don’t comply. He also expressed his intention to ask OPEC to lower oil prices, citing the potential to end the Russia-Ukraine war. The president’s comments sent oil prices down roughly 1%.
Interest Rates and Tariffs in Focus
Trump demanded that interest rates drop immediately, stating that they should follow the US lead. This move could have significant implications for the global economy. Additionally, the president reiterated his stance on tariffs, emphasizing that companies must make their products in America to avoid paying tariffs.
Earnings Season Heats Up
As earnings season continues, investors are eagerly awaiting reports from major companies. Netflix set the stage for next week’s Big Tech flurry, while American Airlines forecast a surprise loss for its first quarter, causing its stock to plummet nearly 8%. Electronic Arts also suffered a 15% decline after its quarterly bookings fell short of expectations.
Chip Stocks Take a Hit
Nvidia supplier SK Hynix’s comments on its earnings call sparked uncertainty about semiconductor demand this year, leading to a decline in chip stocks across the board. Nvidia shares fell as much as 2%, while British chip designer Arm’s stock dropped nearly 6%.
AI and Cryptocurrency Make Waves
At the World Economic Forum, leaders discussed the growing power of artificial intelligence and its potential impact on business. Meanwhile, Bitcoin rose after Republican Sen. Cynthia Lummis announced her plans to chair the Senate Banking Subcommittee on digital assets.
Jobless Claims and Economic Data
The latest jobless claims report showed an increase of 6,000 to 223,000, slightly above economists’ expectations. Other economic data released on Thursday included the Kansas City Fed Manufacturing Activity report for January.
What’s Ahead
Investors will continue to monitor developments on the tariff front, as well as earnings reports from major companies. With the global economy in a state of flux, market volatility is likely to persist in the coming days.
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