US stocks were mixed on Thursday as President Trump's tariffs took effect, hitting nearly 200 countries. While the tariffs added pressure to overall sentiment, the Nasdaq had slight gains, strengthened by a boost from tech stocks, particularly chipmakers. The Dow Jones Industrial Average reversed earlier gains, trading down 0.6%, while the S&P 500 lost 0.34%. The tech-heavy Nasdaq Composite saw a slight uptick of 0.3%, helped by announcements that were positive for Big Tech.
The market fluctuated due to tariff concerns, corporate earnings reports, and significant moves in the tech sector. A key highlight of the day was Apple’s announcement of a new $100 billion investment in US manufacturing, which added momentum to the Nasdaq. Meanwhile, tariff concerns and investor sentiment surrounding the Federal Reserve's next moves remained in focus.
Market Movers:
- Apple (AAPL): +2.73%: Apple rose by 2.73% following news that CEO Tim Cook will join President Trump to announce a new $100 billion investment in US manufacturing. This move is seen as part of Apple's strategy to avoid increasing tariffs on its products. Apple's push for US-based production reflects its commitment to domestic manufacturing and aligns with efforts to avoid new tariffs, particularly on iPhones.
- Nvidia (NVDA): +0.31%: Nvidia gained 0.31% as Trump’s comments about tariff exemptions for semiconductor companies were seen as a positive for the chipmaker. Nvidia, which has committed to producing $500 billion of AI infrastructure in the US, stands to benefit from these exemptions, further boosting its appeal among investors.
- Eli Lilly (LLY): -14.27%: Eli Lilly saw a dramatic drop of 14% after the company released disappointing results from its much-anticipated oral GLP-1 pill trial. Despite posting better-than-expected earnings for Q2, the setback in its clinical trials led to significant sell-off pressure, overshadowing its strong earnings performance.
- Toyota (TM): -1.72%: Toyota fell by 1.72% after the company warned about the impact of US tariffs on its profits. The automaker now expects a $9.5 billion hit from the new tariffs, which are weighing on its outlook for the fiscal year. The uncertainty around trade policy has resulted in lowered revenue projections.
- Firefly Aerospace (FLY): +42.78%: Firefly Aerospace saw a massive surge of 42.78% following its public market debut. The company’s solid performance, particularly with its successful lunar landing mission, sparked strong investor interest. Firefly's promising future in space exploration, bolstered by contracts like NASA’s Commercial Lunar Payload Services program, is driving its stock to new heights.
Trump’s Tariffs and Their Market Impact
President Trump’s self-imposed deadline for trade deal negotiations passed early Thursday, resulting in the imposition of sweeping tariffs on imports from nearly 200 countries. The tariffs range from 10% to 50%, with the effective average tariff rate now projected at 18.6%, the highest since 1933. These tariffs are expected to add pressure to global supply chains, potentially increasing costs for consumers and businesses alike. Companies like Toyota and other US trade partners are bracing for the effects, with some warning of significant financial impacts.
Additionally, Trump previewed plans to implement 100% tariffs on semiconductors unless companies agree to domestic manufacturing in the US. While the proposal initially spooked the market, the potential exemptions for chipmakers, such as Nvidia, which are committed to US production, softened the blow, contributing to tech stock gains.
Apple’s $100 Billion Manufacturing Commitment
Apple's announcement of a $100 billion investment in US manufacturing was a bright spot for the market, particularly for tech stocks. The company plans to manufacture components for iPhones and Apple Watches in Kentucky, aligning with the US government’s push for more domestic production. This announcement is seen as a move to mitigate the impact of potential tariffs and further cement Apple's position in the US economy. While some analysts view the move as primarily political, Apple’s commitment to reshoring production has been seen as a positive step for the company’s long-term strategy.
Disappointing Economic Data and Fed Focus
Economic data remains a key focus for investors. The latest reports show that 1.974 million continuing claims for unemployment benefits were filed, marking the highest level since November 2021. This, combined with the weak July jobs report from last week, has raised concerns about the state of the labor market and the broader economy. Traders are closely monitoring these developments as they signal potential risks to economic growth.
On the policy side, speculation continues about the future of the Federal Reserve's leadership. Federal Reserve Governor Christopher Waller is emerging as a frontrunner to replace Jerome Powell as Fed chair. Waller’s views on economic forecasting, which prioritize long-term projections over current data, have garnered attention from Trump’s advisers, further influencing market sentiment.
Looking Ahead
As the market continues to digest corporate earnings reports, more earnings results will come in later today, with investors looking for signs of resilience amid trade tensions. Companies like Airbnb (ABNB), DoorDash (DASH), and Lyft (LYFT) will be reporting, and their results could provide further insights into consumer sentiment and market conditions. On the geopolitical front, the next few days will be critical for global trade relations, with the full impact of Trump’s tariffs starting to unfold. Companies affected by the tariffs will likely provide further updates in their earnings calls, and investors will be paying close attention to how these measures impact profit margins.
Finally, attention will remain on the Federal Reserve as the possibility of leadership changes could signal a shift in the central bank's approach to managing interest rates and economic stability. The decisions coming out of the Fed soon could play a major role in shaping market trends for the remainder of 2025.