Key Takeaways
- Stocks Posted Strong Gains Despite Inflation Concerns And Tariff Uncertainty
- Meta Platforms’ Seventeen-Day Rally Highlights Unlikely Market Streaks
- Gold’s Record Highs Signal Possible Inflation And Market Caution
Stocks posted their best day of the week on Thursday. The S&P 500, Russell 2000 and Dow Jones Industrial Average all posted gains of right around 1%. Meantime, the Nasdaq Composite gained 1.5%. The run came despite a higher-than-expected uptick in the Core Producer Price Index (PPI) and more tariff talk.
Concerns about inflation began heating up on Wednesday following a Consumer Price Index (CPI) report showing prices ticking higher. Yesterday’s PPI confirmed inflation was moving higher but perhaps not to the extend many feared from the CPI read. Still, the reports have put inflation back on the table and that will likely result in added emphasis placed on both future economic data and what members of the Fed say at any speaking engagement. I think next Wednesday, when the Fed releases the minutes from their last meeting, there will be a lot of tea leaves reading.
Tangentially related to inflation, on Thursday, President Trump said he plans to put in place reciprocal tariffs on countries that have tariffs on U.S. goods. That threat is being seen as taking aim at India and the European Union among others. The specifics of the tariffs are not yet known but are expected to be announced next Tuesday.
One of the things we’ve seen since the new administration took over is a return to policy by tweet. What I mean by that is simply, President Trump often makes announcements via social media and will do so without forewarning. That has sometimes meant policy announcements over the weekend and investors may want to be more conscience of that risk on Fridays.
Turning to earnings, after the close on Thursday both Coinbase and DraftKings announced results. For Coinbase, it was the strongest quarter for revenue in three years as the company beat on both the top and bottom lines. Shares of Coinbase were up 8% on Thursday but are indicated to open down just under 1%. DraftKings also reported their results. While the online betting company missed on both the top and bottom lines, they did report a 36% increase in monthly unique payers for the quarter. They also raised their guidance for 2025. Shares of DraftKings were up 2% Thursday and are trading higher by 5% in premarket. Finally, Applied Materials released their earnings this morning. While the company beat on both the top and bottom line, they offered an outlook below what analysts expected. Shares of Applied Materials are lower by nearly 10% in premarket trading.
One stock that did not report earnings but has been on an incredible run of late is Meta Platforms. That company has seen its shares rise for seventeen consecutive days. The probability of this happening for those that are curious is 0.0000076. If you are someone who has enjoyed the ride and decided you might want to take profits or at least protect them, I don’t think anyone would blame you in light of the probability of what has been happening.
For today, I am keeping an eye on Meta Platforms for the reason I mentioned above. I’m also watching gold. Despite the strength in the market and its ability to seemingly shrug off anything, gold is trading at all-time highs and that may serve as the proverbial canary in the coal mine with respect to a reemergence of inflation and what it could mean for equities. This is also a three-day weekend with Monday being President’s Day and therefore, because of the nature in which policy decisions are being announced, I would not be surprised if we see some selling near the close today. I also wouldn’t be surprised if, while watching television this weekend, we see a ton of commercials for mattress sales because somewhere along the line, we decided it can’t be an American holiday without mattresses going on sale. As always, I would stick with your investing plan and long-term objectives.
tastytrade, Inc. commentary for educational purposes only. This content is not, nor is intended to be, trading or investment advice or a recommendation that any investment product or strategy is suitable for any person.