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Market Commentary - Foreign Markets

Stocks surged across major indices after positive inflation data and a memo from President Trump on trade tariffs. Strong gains were seen in computer hardware, telecom and biotech sectors while bond yields fell.

Wall Street Rallies on Inflation Data and Tariff Memo

14-Feb-2025, 10:15
The Nasdaq surged 295.69 points (1.5%) to 19,945.64, the S&P 500 jumped 63.10 points (1%) to 6,115.07 and the Dow advanced 342.87 points (0.8%) at 44,711.43.

The Wall Street rallied post the release of the Labor Department's report on producer price inflation in January. While the headline number rose by more than expected, components of the Federal Reserve's preferred inflation reading were relatively tame. The Labor Department said its producer price index for final demand rose by 0.4% in January after climbing by an upwardly revised 0.5% in December. A separate report released by the Labor Department showed first-time claims for U.S. unemployment benefits fell by slightly more than expected in the week ended February 8th.

Stocks grew after President Donald Trump signed a memorandum calling on members of his administration to review plans for reciprocal tariffs on U.S. trade partners but stopped short of imposing the tariffs.

Computer hardware stocks substantial moved upwards, with the NYSE Arca Computer Hardware Index soaring by 4.5%. Telecom stocks was significantly strong, as reflected by the 2.7% surge by the NYSE Arca North American Telecom Index. Biotechnology, brokerage and semiconductor stocks too were considerably strong, moving higher along with most of the other major sectors.

Asia-Pacific stocks turned in a mixed performance. Japan's Nikkei 225 Index jumped by 1.3%, while China's Shanghai Composite Index declined by 0.4%. European stocks moved mostly higher on the day. The German DAX Index surged by 2.1% and the French CAC 40 Index jumped by 1.5%, although the U.K.'s FTSE 100 Index bucked the uptrend and fell by 0.5%.

In the bond market, treasuries showed a strong move back to the upside following yesterday's slump. Subsequently, the yield on the benchmark ten-year note which moves opposite of its price, plunged 11.2 bps to 4.52%.