Tariff news settles, Powell in focus 11/02/2025

HOT stories for today

US market wrap:
 

• Trump’s tariffs on steel and aluminum barely caused a ripple in financial markets on Monday—chalk it up to investor fatigue. The trio of heavyweight U.S. stock indexes—the Dow Jones Industrial Average, S&P 500, and Nasdaq—closed in positive territory, while Treasury yields remained largely unchanged from Friday’s levels.
• The ICE U.S. Dollar Index inched up by nearly 0.3% to 108.32, though it retreated from its overnight peak. Meanwhile, gold prices soared to an all-time high of $2,914.30 per ounce, as jitters over Trump’s protectionist policies spurred demand for safe-haven assets.
• Despite the apparent market composure, concerns over persistent inflation and sluggish economic growth loomed large. Analysts at bond powerhouse Pimco cautioned that tariffs targeting Canada, Mexico, and China alone could push U.S. inflation up by 0.8 percentage points while shaving 1.2 percentage points off economic growth within the first year. Still, many investors found solace in a string of robust corporate earnings, fueling a wave of cautious optimism in the market.

All eyes on Powell 

• Federal Reserve Chair Jerome Powell is set to testify before Congress this week, addressing the Fed’s ongoing battle against inflation and its broader policy decisions. He will appear before the Senate on Tuesday and the House on Wednesday, presenting the Fed’s twice-yearly report. The latest report describes inflation as running “somewhat above” the Fed’s 2% target, while the job market remains strong with low unemployment.
• The Fed has entered a holding pattern on interest rates after three rate cuts, as progress on lowering inflation has stalled. Uncertainty has grown due to Trump’s tariffs, which could drive up inflation further. Powell may also face scrutiny from Republican lawmakers aligned with Elon Musk, who has called for an audit of the Fed and suggested installing former congressman Ron Paul as chairman.
• Another key issue will be the Fed’s independence. Powell has consistently pushed back against Trump’s suggestions that the White House should have more influence over Fed policy. While Trump has previously criticized Powell for keeping rates too high, he recently supported the Fed’s decision to hold rates steady. Powell’s testimony could provide critical insights into the Fed’s next moves and how it plans to navigate economic and political pressures.

 
Stocks on the move:       

• Lattice Semiconductor (LSCC): Shares surged about 12% as the chipmaker exceeded analysts’ fourth-quarter revenue projections. The company reported $117.4 million in revenue, slightly above the expected $117.1 million, according to LSEG.
• Vertex Pharmaceuticals (VRTX): The biotech stock dipped 1% following mixed quarterly results. Adjusted earnings came in at $3.98 per share, missing analysts’ estimates of $4.03 per share, while revenue of $2.91 billion outpaced the projected $2.78 billion, per LSEG.
• CoreCivic (CXW): The private prison operator declined 4% after issuing a full-year earnings forecast between 48 and 61 cents per share, well below analysts’ expectations of 82 cents per share, according to LSEG.
• Axsome Therapeutics (AXSM +21%): Shares soared after reaching a settlement with Teva Pharmaceuticals ($TEVA), resolving all patent disputes over its depression treatment, Auvelity.

 
Today’s action

• Asia-Pacific markets showed a mixed performance on Tuesday as investors weighed U.S. President Donald Trump’s latest tariff measures. On Monday, Trump signed an order enforcing a 25% duty on steel and aluminum imports into the U.S. In response, Hong Kong’s Hang Seng Index edged down 0.56%, while China’s CSI 300 slipped 0.36%. Japanese markets remained closed due to a public holiday.
• Meanwhile, U.S. stock futures drifted lower Monday night as investors braced for key inflation data later in the week. Dow Jones Industrial Average futures dipped 44 points, or roughly 0.1%, while futures tied to the S&P 500 and Nasdaq 100 each declined by a similar margin. Beyond economic reports, market participants are closely watching Federal Reserve Chair Jerome Powell, who is set to testify before Congress on Tuesday morning. On the corporate front, companies scheduled to release earnings on Tuesday include Coca-Cola, Humana, Lyft, and Super Micro Computer.

Wahtclist: VRTX, KO, HUM, LYFT, SMCI, META, TSLA, SHOP, DD

Bitcoin

• Bitcoin remains in a precarious position as it struggles to reclaim six figures, with investors anxiously awaiting key economic data that could steer the market’s next direction. Trump’s latest tariff discussions have amplified volatility, and while a temporary tariff rollback has calmed nerves, uncertainty still looms. A worrying signal for traders is the MACD 12,26 momentum indicator turning negative for the first time since October 2024, hinting at potential downside risk. With crucial inflation reports, labor market data, and Federal Reserve guidance set to be released in the coming days, Bitcoin’s trajectory hangs in the balance.
• Despite the uncertainty, analyst Michaël van de Poppe remains optimistic, forecasting that Bitcoin could test $105,000 this week and possibly hit fresh all-time highs before the month ends. Crypto traders are bracing for a pivotal week as macroeconomic forces and Fed signals prepare to shake up sentiment.
  Watchlist: Bitcoin: 89 000-108 000, Ethereum: 2200-3000, Solana: 180-276

Forex

• The Japanese Yen saw modest safe-haven inflows following Trump’s fresh tariffs on commodity imports but struggled for clear direction in Tuesday’s Asian session. Market sentiment remains tilted toward expectations that the Bank of Japan will continue its tightening cycle, providing underlying support for the JPY. However, the US dollar remains firm, as traders anticipate that the Federal Reserve may delay rate cuts, lending strength to USD/JPY.
• Meanwhile, the EUR/USD pair weakened further, hovering near 1.0305 in early European trade. The pair remains under pressure, staying below the 100-day EMA with a bearish RSI. The dollar's resilience, fueled by Trump’s aggressive tariff stance and expectations of prolonged Fed hawkishness, continues to weigh on the euro. The initial support level is seen at 1.0250, while resistance stands at 1.0406, as traders watch for further developments in trade policy and central bank signals.
  Watchlist: EUR/USD: 1.0200-1.0550, USD/JPY: 153.6-158.80

Basic Materials

• Gold surged past $2,900, hitting a new all-time high on Tuesday before retreating slightly as the US dollar strengthened. However, demand for the safe-haven asset remains strong amid escalating trade and geopolitical tensions. President Trump’s move to hike steel and aluminum tariffs to 25%, along with plans for additional trade barriers, continues to fuel market uncertainty, reinforcing gold’s appeal.
• Meanwhile, WTI crude oil extended its rally for the third consecutive session, trading around $72.20 as concerns over supply disruptions deepened. Russian oil production in January dropped below its OPEC+ quota, adding to fears of tightening global supply. Geopolitical tensions also escalated, with Trump pressuring Israel to abandon its ceasefire with Hamas unless hostages are returned by the weekend. Rising trade disputes and geopolitical instability are keeping both gold and oil prices elevated as investors navigate an increasingly volatile market.
  Watchlist: GOLD 2600-2915, US Oil: 70.00-79.00

Key Economic Events Today:

EST time
06:00 am: USD NFIB Small Business Index
08:50 am: USD FOMC Member Hammack Speaks
10:00 am: USD Fed Chair Powell Testifies
03:30 pm: USD FOMC Member Bowman Speaks 

Earnings

BMO (Before the US Market opens)
KO            Coca-Cola Company
HUM         Humana
SHOP       Shopify Inc.
MAR         Marriott Intern.
ECL          EcolaB Inc.
DD            DuPont de Nemours Inc.

AMC (After the US Market closes): GILD, DASH, SMCI, AIG

The TEFS Analyst team wishes you a successful day!