NEW YORK — U.S. stock markets experienced an upward trend on Thursday as investors anticipated an announcement on tariffs from President Donald Trump, with major corporations consistently reporting better-than-expected earnings.
As of midday, the S&P 500 saw a rise of 0.7%. The Dow Jones Industrial Average increased by 163 points, which translates to a 0.4% gain, while the Nasdaq composite surged by 1.1% by 11:15 a.m. Eastern Time.
MGM Resorts International stood out with significant gains, soaring 14.7% after announcing a stronger than anticipated profit for the recent quarter. The company attributed its success to growth in China and positive trends in its Las Vegas and North American digital segments.
Other firms that exceeded profit expectations include GE HealthCare Technologies, which climbed 8%, Molson Coors Beverage with a 6.6% rise, and Robinhood Markets, posting a notable jump of 10.9%.
These strong corporate earnings are supporting Wall Street’s proximity to record highs, the last of which the S&P 500 reached last month. Additionally, the robust U.S. economy continues to foster revenues that lead to increased profits for businesses. A Thursday report indicated that fewer U.S. workers sought unemployment benefits last week, signaling a stable job market.
Despite these positive developments, there are significant concerns that could impact stock values. Chief among these is the persistent inflation that remains higher than desired. A recent report showed that wholesale-level inflation exceeded economists’ forecasts last month, following a similar trend observed in consumer-level inflation the previous day.
High inflation is tightening budgets for American households and is likely to compel the Federal Reserve to hesitate in reducing interest rates, which would normally provide financial relief. The Fed had previously lowered its main interest rate significantly from September through the end of the previous year to make borrowing more affordable and stimulate the economy. However, it has expressed caution about aggressive rate cuts in 2025 due to persistent inflationary pressures. The central bank aims to maintain inflation at around 2%, but lowering rates may exacerbate inflation further.
Potential tariff increases could add to inflationary pressures by elevating import costs. A news conference is scheduled for Thursday afternoon during which Trump is expected to discuss raising U.S. tariffs to align with the tax rates imposed by other countries on imports.
While economists caution about the adverse effects of such tariffs, financial markets seem to be absorbing these threats with a degree of resiliency. There is a growing belief that Trump’s aggressive rhetoric is a negotiating tactic and that he may not fully implement these tariffs to protect the U.S. stock market and economy.
Trump previously demonstrated his capacity to retract such threats, such as when he temporarily paused the imposition of 25% tariffs on all imports from Canada and Mexico. Nonetheless, he did proceed with a 10% tariff on products from China. GE HealthCare has indicated that it considered the impact of these tariffs in its 2025 financial predictions, although it has not specified the exact financial implications.
On Wall Street, Deere & Co. saw a 1.5% decline after the company reported a significant 30% drop in fourth-quarter sales and a 50% decrease in profit, citing a need to manage inventory in light of “uncertain market conditions.” Reddit, the well-known online discussion platform, fell by 7.2% despite surpassing sales and profit expectations for the fourth quarter.
Initially experiencing a substantial gain, Cisco Systems later moderated its rise to 1.6% after reporting better-than-expected profits for the latest quarter, citing strong performance across many of its product lines, including its artificial intelligence infrastructure service.
In the bond market, Treasury yields softened. Typically, unexpectedly high wholesale inflation data would lead to rising yields, but economists noted some encouraging insights from the report, such as declining healthcare service costs that could positively influence a key inflation measure monitored by the Federal Reserve. The yield on the 10-year Treasury decreased to 4.54%, down from 4.63%.
Internationally, stock markets showed mixed results, with European and Asian indexes varying. Japan’s Nikkei 225 increased by 1.3% following announcements from automakers Honda, Nissan, and Mitsubishi that they were ceasing discussions regarding business integration.
