Stock market today: Cisco’s climb helps keep Wall Street steady ahead of a tariff announcement
The American flags hangs on the facade of the New York Stock Exchange in New York’s Financial District on Tuesday, Nov. 5, 2024. (AP Photo/Peter Morgan, File)
NEW YORK (AP) — U.S. stocks are holding relatively steady on Thursday, ahead of an expected announcement on tariffs by President Donald Trump, as big U.S. companies keep reporting bigger profits than expected.
The S&P 500 was 0.2% higher in early trading. The Dow Jones Industrial Average was up 20 points, or less than 0.1%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.5% higher.
Cisco Systems helped lead the way and climbed 4.9% after the tech giant reported stronger profit for the latest quarter than analysts expected. It cited strength for a wide range of its products, including for artificial-intelligence infrastructure.
Other companies reporting better profit than expected included GE HealthCare Technologies, which rose 5.5%, Molson Coors Beverage, which gained 5.2%, and Robinhood Markets, which jumped 16.4%.
Such strong reports are helping to keep Wall Street near its record heights, with the S&P 500’s last all-time high coming last month. So has a remarkably solid U.S. economy, which is helping to drive more revenue for companies. A report on Thursday said fewer U.S. workers applied for unemployment benefits last week in the latest signal of a firm job market.
That’s even though many downward forces are weighing on stock prices.
Chief among them are worries about stubbornly high inflation. A report on Thursday said inflation at the wholesale level was hotter than economists expected last month, following a similar report on inflation at the U.S. consumer level that came the day before.
Besides squeezing tighter on U.S. households’ budgets, such inflation figures are likely to keep the Federal Reserve on hold for a while when it comes to providing relief to Americans through lower interest rates.
The Fed had cut its main interest rate sharply from September through the end of last year, intending to make borrowing cheaper, help the economy and boost prices for stocks, bonds and other investments. But the Fed warned at the end of 2024 it may not cut rates by as much in 2025 because of worries about inflation staying stubbornly high. Its goal is to keep inflation at 2%, and lower rates can give inflation more fuel.
Tariffs could push up on inflation further by raising the cost of imports. A news conference is coming Thursday afternoon where Trump said he’ll discuss increases to U.S. tariffs to match the tax rates that other countries charge on imports.
While economists warn about the pain such tariffs can create, financial markets have increasingly been taking such threats in stride. Belief is growing that Trump is using such tough talk to drive negotiations, but he may not fully go through with it in order to avoid damage to stock prices and the economy.
Trump has already shown he can be quick to pull back on such threats, like when he put a 30-day pause on 25% tariffs he had announced for all imports from Canada and Mexico.
Still, Trump has followed through on some, including a 10% tariff on Chinese products. GE HealthCare said it took those tariffs into account when it drew up its forecasts for profit and other financial measures in 2025, though it didn’t give the exact dollar amounts of the impact.
On Wall Street, Deere & Co. fell 3.4% after the farm equipment manufacturer reported a 30% decline in fourth-quarter sales and a 50% drop in profit. The company said it was focused on reducing inventory amidst the “uncertain market conditions” its customers were facing.
Reddit, the online message board, dove 8.2% even as it handily outdistanced Wall Street’s fourth quarter sales and profit targets. The San Francisco company still lost nearly half a billion dollars in 2024.
In the bond market, Treasury yields eased. The yield on the 10-year Treasury fell to 4.55% from 4.63%.
In stock markets abroad, indexes were mixed across Europe and Asia. Japan’s Nikkei 225 rose 1.3% after automakers Honda, Nissan and Mitsubishi said they’re ending talks on integrating their businesses.
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AP Business Writers Yuri Kageyama and Matt Ott contributed.